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Mark Zuckerberg, Social Revolutionary

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(Photo credit: Wikipedia)

How do you value a change in the social, economic, and political landscape? With the IPO looming, many think about Facebook in too limited a way. This company's product speeds communications between people and even alters the definition of friendship. It gives businesses a newly-efficient way to target ads and customer messages. For citizens, it is a powerful tool for political organization. Calculating Facebook's long-term potential only through the lens of projected revenue and earnings growth, or through comparisons to other companies, fails to account for the many ways it is unique.

Facebook CEO and founder Mark Zuckerberg aspires to build the identity infrastructure for the planet. That is an overweening ambition, but not an irrational one given its astonishing success thus far. Facebook plays a larger role in human interactions worldwide than any other company. It is increasingly a universal directory—a place where you can find and reach anyone even if you don't know their email address or phone number. More than 900 million people routinely spend time there.

It may be most helpful to think of Facebook as a movement—that's a word Zuckerberg himself has used since 2007. To understand where he may take the company, think of him more as a social revolutionary than a businessperson.

In a way not dissimilar to how revolutionaries of earlier eras convinced societies to change through the force of their rhetoric and their political organization, Zuckerberg is convincing the world to change through software. He aims methodically to fulfill a vision he and his friends have held since he was 19 in mid-2003—that the world would be inalterably transformed by transparency of information and by increased sharing of thoughts and ideas. People will learn things more readily and will thus in effect gain more control over their world. This is how he sees it and this is what he works for. We, the people of the world, are responding with enthusiasm by the hundreds of millions. It isn't really about posting photos or "poking" or finding out where the party is Saturday night, though Facebook works fine for all that.

"I often say inside the company that my goal was never to just create a company," Zuckerberg told me in May 2009 when I was reporting my book, The Facebook Effect: The Inside Story of the Company That is Connecting The World. Even then he faced criticism for his attitudes, but like many of his era, he believes the point of business is more than to make money. "A lot of people have been misinterpreting that as if I don't care about revenue or profit or any of those things," he continued. "That's not actually it at all. You need to do those things to succeed in any meaningful way. Building a good economic engine is what allows all these other platform companies and advertisers and other partners to exist, and be a part of this ecosystem. Ultimately what not being just a company  means to me, is just not being just that—building something that actually makes a really big change in the world."

That really big change in the world is happening. Facebook helps us take our friends and interests with us wherever we go. It convinced us for the first time to use our real names and genuine identities on the Internet, and helped us build our digitized "social graph"—a representation of relationships with friends and things that interest us. It succeeded so well at this that it can fairly be called a monopoly. Then it built a platform, a software infrastructure that lets Websites and companies take advantage of all that information to help users and customers create communities around any business or activity. Now, as we are increasingly connected to the Internet everywhere we go using smartphones and other portable devices, those capabilities can come along.

Zuckerberg has proven to be a superb CEO and has matured quickly. (He just turned 28.) But he thinks more like a man on a mission. If he operated according to ordinary calculations, he wouldn't have turned down Microsoft's offer to buy Facebook for $15 billion cash in the fall of 2007. Zuckerberg, who at 23 would have taken home close to $4 billion personally in such a deal, didn't even consider accepting it. He had bigger things in mind.

He wanted to spread Facebook across the world. At the time it operated almost entirely in the United States. Today it is a social, commercial, and political presence in almost every country on the planet, excepting just a few like China, Cuba, Myanmar, and North Korea. Its global success in more than 75 languages validates Zuckerberg's instinct that people everywhere want to share in similar ways.

Impressive progress, you might think. But he thinks he's just getting started. The main thing he focuses on each morning is how to extend Facebook to all seven billion people, including those in China. (He puts such a high priority on this he has become proficient in Mandarin.) He will think and act the same post-IPO. Building shareholder value will be important, but less so.

Zuckerberg had the good judgement four years ago to hire Sheryl Sandberg as COO. She developed an impressive, profitable, and growing targeted advertising business inside Facebook. But with its stock so expensive, only extraordinary growth will satisfy investors longterm. There remain many untapped business opportunities. Facebook could, for example, create a powerful network to distribute targeted advertising to its millions of platform partners across the Web. It might also turn its internal currency, called Facebook Credits, into a tool for a wider range of transactions than just purchasing virtual goods, Credits' main role today.

Many conventionally-minded business pundits express dismay that Zuckerberg controls 57% of the company's voting power. But he has had absolute authority since 2005. Do you think if Facebook had been controlled by other investors when Microsoft made that $15 billion offer that the three-and-a-half-year-old company would have remained independent? If Zuckerberg hadn't had the power to steer it, Facebook would not have become the global force it is today. Properly exercising such absolute power will become steadily more challenging, though, as Facebook grows to billions of users in an ever-more-complex global social, business and political ecosystem.

Not that an investor's bet might not pay off big. But make no mistake, you are betting on Mark Zuckerberg's vision and judgement. He has said he plans to remain CEO for 30 more years. He believes the company will be worth much more in the future than today, but also believes that will only happen if it succeeds further with its global social mission to make that really big change in the world.

Facebook has occasionally been rightly accused of disregarding the privacy of its users. In thinking about privacy and Facebook it's useful to think about cities. It helps crystallize the scope of Facebook's global role. The history of humanity is mostly one of villages and small towns. In a village there is typically so little privacy you hear everything in the hut next door. But since around 2009, for the first time, a majority of the planet's population lives in cities. Isn't it interesting that just as that transition happens, the most popular communications product ever invented is one that recreates the over-the-backyard-fence transparency of the small town?