Facebook botched the way it announced CFO Gideon Yu’s departure, insinuating that it fired Gideon because it needs a CFO with public company experience. This was obvious spin, and the company got called on it.
“There’s been a lot of wondering how this could have gone in other ways,” a source close to Facebook’s thinking told us yesterday.
In a leaked memo obtained by Kara Swisher, Facebook CEO Mark Zuckerberg invoked another departure cliche, implying that Gideon left the company to spend more time with his family:
I’ll always be grateful to Gideon for his contributions to Facebook and what we are trying to accomplish. As those of you who know him know, Gideon’s family is his highest priority and it’s certainly not the usual cliché to say that he plans to take some time off to be with his wife and son. Gideon and I have often discussed that the next stage of his career will likely be as an investor, and I fully support him in this regard.
There’s a reason that’s the oldest cliché in the books. It’s usually code for: ‘We had our disagreements and you’re not going to hear about them.’
*UPDATE: We originally thought this memo was written after Facebook floated the public-company-CFO spin for Gideon’s departure. It actually came first. So it wasn’t part of Facebook’s second-guessing of the public-company-CFO thing.
Here’s the memo (Update: the first copy of the memo Kara obtained had some funky punctuation and repeated sentences. Later versions corrected the mistakes. We decided to post one of the cleaned-up version):
COMPANY CONFIDENTIAL – DO NOT FORWARD
Hey Everyone –
Today ends the first quarter of 2009, so I wanted to send out an update on our growth and financial progress, as well as a couple of changes we’re making.
Our user growth has been extraordinary over the past year and has continued to be strong throughout Q1. We’re getting very close to reaching our 200 millionth active user. This is pretty remarkable considering we just reached 100 million actives a little more than seven months ago. We’ve become the top site for sharing information on the web, and this gives us a good strategic position to help people share even more.
I’m also pleased that our financial progress has been very strong as well. While we came into this year wondering how the recession might affect us, our financial performance in the first quarter surpassed our expectations. As other businesses around us are slowing down and cutting back, we continue to grow around the world. Our advertising products are becoming more attractive for advertisers and we have seen strong growth in both our domestic and international direct sales and online sales channels.
Even in the current economic environment, we’re confident that this success will continue. Based on our first quarter results, we now believe we are on track to see our revenue grow by at least 70% this year. We just completed our 5th straight quarter of EBITDA profitability. And most importantly, we expect to achieve free cash flow profitability next year. That’s an important measure of financial success and sustainability because it means we’d be able to fund all of our operations and server purchases from the cash we generate while increasing our cash reserves in the bank. Hitting these numbers will require continued hard work, discipline and execution by everyone here at Facebook, but we are on the path to achieve these goals.
As we ramp up to take on these challenges, I want to let you know that 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. I’ll always be grateful to Gideon for his contributions to Facebook and what we are trying to accomplish. As those of you who know him know, Gideon’s family is his highest priority and it’s certainly not the usual cliché to say that he plans to take some time off to be with his wife and son. Gideon and I have often discussed that the next stage of his career will likely be as an investor, and I fully support him in this regard.
We have retained Spencer Stuart to search for a new CFO and we will be looking for someone with public company experience who can help take us to the next stage in our growth. In the interim, the finance team will be reporting to Cipora Herman’s in her capacity as Treasurer and Ted Ullyot as mteam lead. In addition, [Facebook is] fortunate that Peter Currie, the former CFO for Netscape, has agreed to serve as advisor to Facebook until a new CFO comes on board.
As always, please feel free to reach out to me or to others on mteam if you have any questions about our finance plans or organisation. I’ll discuss this more at the Q&A on Friday and I’ll be happy to take questions then too.
Congratulations to everyone on a great start to the year and on all the momentum you’ve all helped build for the rest of 2009.