Facebook Still Seeks Entry to China -- WSJ
June 21 2016 - 3:06AM
Dow Jones News
By Deepa Seetharaman
REDWOOD CITY, Calif. -- Facebook Inc. executives Monday
reiterated interest in entering China, where the world's largest
social network is banned, as they answered questions at the
company's annual shareholder meeting.
"We're learning, we're studying about the Chinese market and
we'll see what happens," Chief Operating Officer Sheryl Sandberg
said, adding that she was in China last week.
Ms. Sandberg said she met many of Facebook's top clients in
China, who use the platform to show ads to users outside the
country. Facebook doesn't maintain an office in China, but sells
ads to some Chinese companies.
Facebook's interest in China is well-documented, though the
company isn't expected to win approval to offer its network there
anytime soon. In March, Facebook Chief Executive Mark Zuckerberg
jogged through Tiananmen Square -- without a pollution mask,
sparking a lot of debate on his Facebook page.
In the business portion of the meeting, shareholders approved a
company plan to create a new class of shares and re-elected all
eight directors including Peter Thiel, the Silicon Valley
entrepreneur who recently disclosed that he had covertly backed
lawsuits against Gawker Media. They also rejected five shareholder
proposals, on subjects ranging from giving shareholders more of a
voice at the company to gender pay equity.
The outcomes were no surprise, as Mr. Zuckerberg holds majority
voting power and, therefore, has the vote that matters most. In a
question-and-answer session after the meeting, questions largely
centered on Facebook's product plans. Mr. Zuckerberg won a standing
ovation when he said he plans to run Facebook for a very long
time.
In April, Facebook proposed creating a new class of nonvoting
shares that would cement Mr. Zuckerberg's control over the company.
The new Class C shares will have the same economic rights as other
shares but wouldn't have voting rights, allowing Facebook to
distribute them to employees and through acquisitions without
diluting Mr. Zuckerberg's control. Google parent Alphabet Inc. made
a similar move in 2014.
The meeting did allow shareholders who want more of a say to
voice concerns. Christine Jantz, chief investment officer for
NorthStar Asset Management, spoke out against the plan to issue
non-voting shares. In an interview after the meeting, she called
the setup "a disturbing trend" that diminished the power of
shareholders to provide input on a variety of issues, such as Mr.
Thiel's role on the board.
"There are two schools of thought here, those that want to wrest
control from management" and those who are comfortable with the
current setup, said James Richard Wohltmann, a 70-year-old investor
who attended the meeting. "The lack of openness isn't going to
change, so you build that into the risk profile of the
company."
More than 100 shareholders were in the room at the Sofitel hotel
in Redwood City, Calif. Only four of the eight directors attended:
Mr. Zuckerberg, Ms. Sandberg, Susan Desmond-Hellmann, chief
executive of the Gates Foundation, and Erskine Bowles, a former
White House official and president emeritus of the University of
North Carolina.
Mr. Thiel wasn't there, nor was venture capitalist Marc
Andreessen, WhatsApp founder and CEO Jan Koum and Netflix Inc. CEO
Reed Hastings.
Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com
(END) Dow Jones Newswires
June 21, 2016 02:51 ET (06:51 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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