Facebook is losing its CFO Gideon Yu. The Wall Street Journal broke the news earlier today, and speculated that the reason could be that Facebook might want to make an early bid for an IPO and wants a CFO with public company experience (which is complete nonsense). Yu was previously the CFO of YouTube. At Facebook, he was key to raising money from Microsoft at the famous $15 billion valuation, but as the economy soured he was not able to find as many takers at that same price, despite Facebook’s voracious need for capital to keep up with its growth.
A Facebook spokesperson has confirmed Yu’s departure to us, providing the following statement.
Facebook confirms that CFO Gideon Yu will be leaving the company. Gideon has played an important role in helping us achieve our financial success, building a strong finance team and establishing the core financial operations of our company. We are grateful to Gideon for his contributions to Facebook and what we are trying to accomplish. Despite the poor economic climate, we are pleased that our financial performance is strong and we are well positioned for the next stage of our growth. We have retained Spencer Stuart to lead our search for a new CFO and will be looking for someone with public company experience.
High-level departures are becoming more common at Facebook as it strives to match its managerial talent to its ever-changing needs. Part of Yu’s job was to find capital to keep Facebook’s server farms growing. He was certainly in constant discussions with various investors, even going to Dubai last year looking for deep wallets. But he came home empty-handed.
An early IPO may not necessarily be the best thing for Facebook right now. Its revenues are rumored to be growing faster than many people think, driven by a huge inventory of advertising spots. Even if those ads are sold for pennies apiece, those pennies add up. One insider claims that revenues are on track to exceed $400 million this year. But Facebook would do better to wait until it starts generating substantial profits before testing the IPO waters. Going out too soon may just be a sign that it can’t find funding in the private markets.
Monetize that!
Did he see them becoming Friendster…probably. A Quality CFO can only make a pile of shit smell so good. I am sure he did a great job.
These Friendster comparisons and “facebook is just a fad” comments are getting old…
Clearly the people making these derisions do not understand what facebook is accomplishing. Remember, Amazon wasn’t all about the quick-buck; Jeff Bezos knew market share was a higher priority. And Facebook’s demographic statistics says it all: it’s here to stay.
My opinion with this news is that there was a valuation conflict, most likely Zuckerberg refusing to acknowledge Facebook is worth less than $15 billion, so he can continue being a delusional paper billionaire.
That being said, he has built an excellent product, and the Amazon-strategy will definitely pay off in the end, as the internet becomes more socialized, accelerating the propensity of the use of a universal web identity (see Facebook Connect) more and more.
Totally agree!
SSSSHHHHH!!! what the hell is wrong with you?? The more idiots that think like HMMMM, the better for the rest of us – we stand to leverage the true potential of facebook to make some actual money.
No way Jose. There is something going on at FB that is material. This guys just joined and now bails?
I agree, I wonder what is going on. I know there is mention of them going public, but I wonder if it is something deeper.
$200 Million bailout for FB, it causes systemic risks for all of us; instead of being on FB people would be driking…
Something is seriously rotten at Facebook. This guy worked at a very senior level for Yahoo for many years. This is total BS that they are looking for someone with public company experience.
This company is not and will not go public. This is a desperate ploy to sell themselves to Microsoft or Google, plain and simple.
The Facebook line is BS.
Gideon has public company experience.
Last time I checked Yahoo was a public company …
that is to bad.
that is to bad.
If it isn’t becoming obvious, Facebook is a flash in the pan, just like MySpace, just like FriendSter, just like every other social network that came and went. It is not a Google killer, and it is not the next big thing. It is a glorified address book, login service, and hosted app provider.
TechCrunch has relentlessly been pumping social network companies that build toys that most ordinary people don’t use. The Twitterati and Facebook users who religiously use the service can’t grow it into to something we depend on like Microsoft or Google. It’s a diversion, not a utility.
Facebook is going to burn through their money quickly in a ‘grow big fast’ scenario, and find out it can’t scale revenues quick enough to match. Then it’s going to look at being bought out or IPO, either way, it’ll be a has-been in 5 years.
It is not a viable, real, business, especially in the current economy.
I agree with you. I think very soon the attention from FB to the next big thing will be diverted. Unfortunately as each second passes by the chance of FB making money gets diminished.
Dear Fellows, dont we know how the Facebook business is all about? Do you really think that the Priceaearning Ratio is a measure of value? That Facebook its a 16000 million dollar venture?
Just go to their major VC and take a look at the book they have on their reception desk, it says they are expert on achieving more than 40% of returns on Bubbles. It´s writting “Bubble” in every page of it. This is what it is the same that happened with Globenet 10 years before, the first social network, an amazing experience.
a change on F policies?
Letting go your existing CFO for public company experience is just not convince me. There is something fishy going inside FB, time to more to Friendster or RandomPage.
That is a very interesting perspective, and one that is difficult to argue with!
I would like to know the inside scoop. But for now .. I would like to be able to login into FB. 4 days in a row that I can not login on and off.
Facebook is finished. All they do is BS. Everyone I know is deleting the FB accounts and going the way of Twitter and Gmail. An address book is only so useful with people in it.
Eric,
You need to rewrite your second sentence because it misstates the WSJ article. The WSJ was not speculating, they were quoting someone “familiar with the matter.”
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TC
“The Wall Street Journal broke the news earlier today, and speculated that the reason could be that Facebook might want to make an early bid for an IPO and wants a CFO with public company experience (which is complete nonsense).”
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WSJ
Facebook is looking for a CFO with “public company experience,” the person familiar with the matter said.
TechCrunch is great at calling poor journalism when it sees it. It always discloses its vested interests in certain companies etc…They are also good at quickly correcting their mistakes…Also Erick is usually not one to be sloppy like that, but lately TC has had a lot of misstatements, poor calculations, and odd assumptions. (Sarah’s numbers in her Israel post were quite debatable etc)…
It seems like the necessity to churn out posts faster than everyone else comes at a cost to their content. Perhaps they should slow it down a bit or add some layer of oversight or fact checking before posting…I wouldn’t ask this of most blogs, but TC has becoming a legitimate source of business news and should remain one…
Just my thoughts.
Second Zach! Totally!
He can’t write.
Which is sad for a co-editor of the entire site.
I really liked looking at TC, but this kind of news guys you can reel off any RSS feeder, the start-ups, inside news, and real features are what define good blogging, I look forward to more of this from TC – as we still like you.
Another April Fools prank? Sad state of affairs inside Facebook. The Facebook alumni facebook is thicker than it’s current facebook.
Such abrupt high level departures mean more than they say. I wrote about it here at:
http://subbaiye...quits-suddenly/
Very rightly said the economic crunch leading towards online businesses as well.
It’s my fault aswell as I use adblock on facebook to block stupid banner ads…
Last time I checked Yahoo was a public company …
Facebook is looking for a CFO with “public company experience,” the person familiar with the matter said.