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Facebook was shaken last week by the departure of two key executives – and this could be a sign of a darker time.
On Thursday, CEO Mark Zuckerberg announced that Chris Cox, the company's product manager and one of his senior lieutenants who had been working for Facebook for more than a decade, was quitting. Chris Daniels, WhatsApp Messaging Manager, is also leaving.
The reason for their departure? According to many information and hints in Cox's farewell note, it's their disagreement with Facebook's plan to move to a more messaging-oriented platform.
Their releases are another sign of upheaval at Facebook, which has been the subject of scandals over the past two years, and the latest in a growing series of leaders to head out to the outs. And, according to one analyst, this could trigger other departures and other problems in the future.
In an investor research note released Monday, Laura Martin, an analyst at Needham, said that Facebook would run the risk of "negative network effects". In simple terms, network effects occur when multiple elements reinforce each other, reinforcing the "network" as it develops.
Facebook is a great example: when users have massed to sign up early, the growing number of users has made the presence of people you know more likely, which makes you more likely to sign up. thus encouraging others to sign up. also, and so on.
But the network effects can work in the other direction and, in this case, one of Facebook's famous assets – its extremely mission-driven business culture – could work against it. said Martin.
"The type of beleaguered network effect at FB is based on" beliefs "that every additional person who believes in something is more likely to believe that the next person will believe the same thing," he said. she writes. "When Chris Cox (product manager) and Chris Daniels (WhatsApp chief) leave FB because they disagree with the strategic director that CEO Mark Zuckerberg instituted, this implies that they no longer believe in FB. "
She added: "The problem is that: a) other members of the organization will agree with them and will also leave, and every person who is in will make the next person more likely to leave, and b) Silicon Valley is a competitive place The loss of these top executives at FB can lead to them landing in a company competing with FB and recruiting others. "
In a nutshell: Facebook CEO departures could have a domino effect, prompting other members of the management team to lose confidence and bail out – and in doing so create more attractive job alternatives. for former employees.
Shares of Facebook fell 3.5% on Monday after many Wall Street analysts (including Martin) expressed concern over some of the issues facing the company, including confidentiality, regulatory risk and Reputation attacks caused by incidents such as the New Zealand shootings, which was streamed on Facebook's application.
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