SUNDAY MORNING FUTURES

Exclusive: Facebook COO Sheryl Sandberg

Seismic changes ahead for social media

 

This is a rush transcript from "Sunday Morning Futures," April 27, 2014. This copy may not be in its final form and may be updated.

MARIA BARTIROMO, HOST: Thanks Eric, The technology giants bracing for seismic changes over the next few years. In their first quarter earnings appear to bear that out. Facebook chief operating officer, Sheryl Sandberg, sat down with me this week exclusively right after her company posted first quarter results. I asked her about those numbers.

(BEGIN VIDEOTAPE)

SHERYL SANDBERG, CHIEF OPERATING OFFICER, FACEBOOK: We had a great quarter. We grew our overall revenue 72 percent year-over-year and our ad revenue 82 percent year-over-year. Which is the strongest ad revenue growth we have had in three years. I think we're really excited about the trends we're seeing and I think leading. The shift to mobile, the shift to personalized marketing at scale, the ability to reach your customers wherever they are with a message that's right for them.

BARTIROMO: That's right. You say that it is a shift and a trend because it is overall increasingly that we're seeing money moving towards social in terms of advertising, mobility in terms of advertising. Give us your expectation of how this plays out and what your expectations are for that shift accelerating in the coming years.

SANDBERG: The consumer shift is real and I think marketing trends follow consumer trends. Last year was the first year where the average consumer in the United States spent more time on digital than, and that mobile and desktop combined, than they did on TV. The number now is increasing even more. The average U.S. consumer spends 4 1/2 hours per day on TV and 5 3/4 hours on mobile. That's also a really positive shift for Facebook. We get 1 in 7 minutes on desktop, but we get 1 in five minutes on mobile. That's a full 20 percent of consumer time. Marketers want to reach people where they are with relevant message and I think as consumers shift to mobile we are going to see marketing shifting there as well and I think that's part of what you are seeing in our results this quarter.

BARTIROMO: Let's talk about the video opportunity, Sheryl. A lot of people look at the video opportunity as being a really big opportunity for the space and for Facebook. One investor I spoke with who likes the company very much said they think this is going be a billion dollar opportunity for Facebook. Is what that you expect?

SANDBERG: Video is increasingly part of people's daily experience and their mobile experience because smart phones are getting more ubiquitous and just getting much faster. So the percentage of time we all spend on video is increasing. We have a current video product, it's a click to play product where people can post a video into news feed. That product is going very well and continues to explain some of our growth. We are also increasingly seeing auto play videos, in news feed, from consumers right now. That means when you're scrolling through your news feed on Facebook, if you pause on something the video automatically plays. We're in very early conversations with marketers about using that auto play video product, but we are going to move slowly there because we want that to be part of the consumer experience on Facebook before we make it a large ad product. That's why I said on our recent earnings call that we don't expect a material contribution from video ads this year. Over the long run however I think the opportunity is really big. Video is so exciting for consumers and so effective for marketers.

BARTIROMO: Facebook has been a leader; you have been a leader in this space. Can you look ahead five years and tell us what the world looks like as an increasing number of people are getting together across the world in a social way? How do you think this plays out?

SANDBERG: Right now almost two-thirds of the world's population is not online. Or doesn't have access to data. That means two-thirds of the world's population doesn't have the benefit of that kind of connection. We're really focused on changing that, on building up connectivity around the world, on making the world a little smaller and a little more social for everyone.

BARTIROMO: You're right Sheryl, because the truth is having an encyclopedia in your pocket changes your life. There are people who don't have access to information that immediately have access to information with a mobile phone and can see all sorts of changes in their lives.

SANDBERG: The average person with a phone in the U.S. is walking around with a phone which has 100,000 times the computing power of the original computer that sent the first man to the moon in 1969, which is the year I was born so it can't be that long ago. That's incredible. We are all walking around with social mobile devices that connect us. That give us really identity, with the power to share and I think the power to make the world a little smaller and a little bit better.

BARTIROMO: Sheryl, you just said you were born in 1969. You have had such a career from Google to Facebook. You're a leader in your business. To what do you attribute your success?

SANDBERG: One of the best things that happened to me, and of course fundamental, was a great education. I got that in public schools in Miami Florida and through university. I really worry about our competitiveness as a country because we're not providing that great education to every single student - every single student in this country. Really every student in the world deserves a great education. That can be the basis for real opportunity. I also think, and lean in work speaks to this, that in order to get the best results we need the full talents of the population. Women fully engaged in the work force. Women full engaged in leadership roles, and men full engaged at home. That is critical to our performance as an economy but also to our performance as companies. When it's an issue for Facebook, it's part of why we perform well, and getting more women into leadership ranks will help us more. I think that's true of every company out there.

BARTIROMO: Well, I personally have to thank you for all that you have done for women with the lean in movement and I think it's that reason that people are hoping that you don't leave and go to another career. Can you tell us that you're not going to run for Dianne Feinstein's Senate seat?

SANDBERG: I'm not running for any Senate seat. I really love my job and I love my days. I spend my days at Facebook. I get to work with people around the world as Facebook makes their lives better. I get to work with marketers around the world to make marketing really personal, something I believe in. I get to do lean in, in my spare time. I have a full-time team doing lean in, I chair the board, and I think they are making a difference for women around the world and that matters to me a lot.

BARTIROMO: Sheryl, thanks so much for your leadership and thanks for your time tonight. We appreciate it.

SANDBERG: Thank you so much for having me, Maria.

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