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David Kirkpatrick: Hello. I’m David Kirkpatrick. I run something called “Techonomy Conference” which is a place where technology leaders come together with business and government leaders to talk about how technology is changing everything. Conference happens in November, south of San Francisco.
Now, I met Mark Zuckerberg in 2006 when he was 22 years old and Facebook had nine million users. I was so impressed with him from that very first meeting and impressed with his long term vision and the scope of his thinking that I ended up writing a book called “The Facebook Effect” which by the way is published in both Spanish and Catalan.
And now Facebook has 1.2 billion users. So from September of 2006, 9 million, today, 1.2 billion. It’s the largest communication service of any type that’s ever existed.
There’s one movie that portray Mark as an anxious, angry and vindictive person. But that is not the way I have ever found him. In fact it’s actually his sincerity and his earnestness that most impresses me. He thinks a lot about how his company is changing the world for the better. And I think, when you hear him talk you’re going to understand what I mean.
So, Mark, please come out and join me.
Okay, Mark. So, clearly there’s one topic that we have to start with. It’s been on everybody’s lips for the last week or so. You bought WhatsApp for $19 billion which all of us, once we got over, you know, our shock at that, you know, some of us feel like we understand it. But tell us here at the Mobile World Congress, which is really the world’s major gathering of mobile communications – which is an industry that WhatsApp is a big part of, why did you do it and what does it mean?
Mark Zuckerberg: Well, WhatsApp is a great company and it’s, it’s a great fit for us. Already almost half a billion people love using WhatsApp for messaging. And it’s the most engaging app that we’ve ever seen exist on mobile by far – that’s 70% of people who use WhatsApp use it every day – which kind of blows away everything else that’s out there.
What we see is that WhatsApp is on a path to connecting more than a billion people. And there are very few services in the world that can reach that level. And they’re all incredibly valuable.So, when we have the opportunity to be a part of his journey, I was just really excited to take you up on that and to help him realize his dream of connecting a lot more people.
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David Kirkpatrick: It’s Jan Koum was the CEO of WhatsApp.
Mark Zuckerberg: Yeah. Yeah. Exactly.
You know, in terms of fit for Facebook, when Jan and I first met and started talking about this, we really started talking about what it was going to be like to connect everyone in the world. Right? And a lot of – this is the vision for Internet.org and that’s what I really want to take the time to focus on today.
And it wasn’t really until we got aligned on that vision between Facebook and WhatsApp that we actually started talking about numbers and decided to make a deal. But, but it’s that vision that I think makes the company such a great fit, and it’s the shared kind of goal to help connect everyone in the world.
And, you know, today, what we – what I really want to focus on is Internet.org and how we can build this model for this industry that can deliver the internet to, you know, five, six – ultimately everyone in the world.
And in doing so, build what is going to be a profitable model — a more profitable model with more subscribers for carriers and get everyone on the internet in a much shorter period of time. And hopefully, that video that you were showing up front said that we’re going to connect another billion people by 2020. I hope we can do a lot better than that.
David Kirkpatrick: Yeah. Well, yeah. I know you are planning to come here long before you, you bought WhatsApp. But what you’re saying is — the thing that tore you away from the geeks you most love to hang out with in Silicon Valley was this Internet.org vision. So, tell us why is Internet.org so important to Facebook and what does it mean to the audience at Mobile World Congress? What lead you to do it and why are you here to talk about it?
Mark Zuckerberg: Well, one thing that I think, it’s easy to take for granted is that most people in the world don’t have access to the internet at all. Right? It’s only about a third of people have any access to the internet – it’s about 2.7 billion people today and it’s actually growing way slower that you’d imagine. Right?
So, you know, people often talk about how there are five billion phones in the world. And that’s pretty quickly transitioning that, you know, in five or ten years, most of those will be upgraded to smart phones and that kind of carries this implicit assumption that as that happens people are going to have access to the internet.
But that’s actually just not true. Right? I mean the most expensive part about owning a smart phone and being connected to the internet isn’t the smart phone, it’s the data connection. Right? If owning an iPhone for two years cost about $2,000 in the US and about $500 of that is the phone and 1,500 is the data plan.
David Kirkpatrick: Mm hmm.
Mark Zuckerberg: So we’re really not on a path to connect everyone unless something pretty dramatic changes. And that’s something that, you know, after Facebook reached this milestone of helping to connect a billion people, we took a step back and we’re like, all right, what problem in the world can we try to help solve next? And, you know, we didn’t come here to – our vision isn’t try to connect one seventh of the world, it’s to try to connect everyone. And in order to do that, we need to form these partnerships because no one company can change the way that the internet works by itself.
So it’s a really important problem. Right? I mean, the reason why I care about it is, it’s not that connectivity by itself is an end in itself — it’s the things that connectivity brings.
David Kirkpatrick: So (inaudible)…
Mark Zuckerberg: Right? It’s that when you have access to the internet you have – you know, a lot of people for the first time who have access to things like basic financial services, they can get credit to start a business or get a home or access to basic health informations that they can understand conditions that they’re family might have or help bring their children up more healthily, access to basic education materials.
I mean, there’s this Deloitte study that just came out, I think it was today or yesterday, that showed that if you increase the number of people in emerging markets that have access to internet you could easily create more than a 100 million jobs and bring that many people or more out of poverty. And you could decrease the child mortality rate by up to 7% and save millions of lives by giving people access to that information.
So, we think it’s just this really important problem to work on.
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David Kirkpatrick: So talk about what exactly what is Internet.org?
Mark Zuckerberg: So it’s a partnership and it’s this industry coalition that’s working together to build, to make delivering the internet — all the different parts of it more efficient and to make it so that everyone in the world can have access to some basic services on the internet for either a really affordable price or free as the real goal for basic services.
And we think that we can do this in a way that gets people access to some basic services while increasing the overall number of subscribers and profits for the overall industries that people can invest more in building up this infrastructure even more.
You know, the thing that I think a lot of people miss is more than 80% of people in the world actually already live in an area where there’s 2G or 3G access. Right? So sometimes people talk about stuff like satellites or balloons or thing like this piece of technology to be able to connect everyone. And it’s true that that’s going to be necessary for the last few percent of people who live in really rural areas where this infrastructure doesn’t exist.
But for the rest of people, the things that are – that if you don’t have internet for the next few billion, there are really only a couple of reasons why. One is affordability which actually isn’t even necessarily the main reason because most of the next few billion people actually have, you know, a few dollars that they can spend on this.
The much bigger question is why they should spend their, you know, one or two or $3 like that that it would take to get basic data access on this. Right? If you didn’t grow up with access to the internet then you may not know the answer to why you would want a data plan. Right? So, we’re kind of (caught this)…
David Kirkpatrick: They didn’t even know why they want the internet you said?
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Mark Zuckerberg: Yeah. You’re kind of caught in this catch 22 where you don’t necessarily have a lot of money. You have enough that if you wanted to, you could buy an internet data plan. But you don’t know what you would get with that and because you’ve never had access to that. So a lot of the goal that we have with Internet.org is to create a sort of on-ramp for the internet. Right?
And one of the models that we have is, you know, with the fixed land phone, you know, you can pick up the phone and in the US that lets you dial 911 and you can get free access to some basic services. Right? So if there’s a health emergency, you can always get help, if there’s a fire, you can get a help, if there’s a crime, you can get help.
And we want to create a similar kind of dial tone for the internet. So, the idea is that there’s a set of basic services that we think should exist, you know, whether it’s messaging or being able to know what the weather is, or food prices, or things like Wikipedia or basic search or basic social networking that I think should be these just basic services that everyone should be able to access. And they have a couple of things in common all those services.
David Kirkpatrick: So it’s like 911 only because it’s the internet it has way more potential than just dialing a number on the phone.
Mark Zuckerberg: Yes. So, all those basic services that I just said have a couple of things in common, right? So the first is that they’re all text-based for the most part. So incredibly low bandwidth and cheap to serve and offering them for free or cheap. Therefore, it’s actually a reasonable business proposition. And the second is that a lot of them, especially things like messaging and social networking and search are portals to more content, all right? So, you’re never going to have things like high-res video or streaming media –be basic services in a model like this.
But a lot what people do through services like Facebook is discover things like news that they would want to read or videos that they would want to watch or
apps that they would want to download. Reasons why you’d consume more data that people otherwise wouldn’t know.
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So, if you have access to these kind of basic services then that kind of answers this catch 22 question and makes it kind of clear to folks here is why it’s completely reasonable and why I should spend my dollar or two on getting a data plan and kind of fuel more investment in the whole industry to build up more infrastructure and make it so that more folks can get online.
And one thing is this isn’t entirely theoretical. We’ve actually been working with a bunch of the partners in Internet.org for the last year. Building out a lot of infrastructure and we already have some really promising results on this. So in the Philippines, for example, we’ve been working with Globe and [claps]– yeah, there you go.
David Kirkpatrick: There’s the Globe people over there. They’re okay.
Mark Zuckerberg: Awesome. Thank you for your partnership. And, you know, what we’ve seen in the Philippines is the number of people who are using internet and data has doubled. And Globe subscribers have grown by 25%. And, so it’s a home run, it’s going really well.
David Kirkpatrick: What did you do to achieve that?
Mark Zuckerberg: We deliver this product; we’re basically in partnership with them. It’s – you know there’s free basic services with upsells that to, to have that access to more content.
David Kirkpatrick: So using Facebook is free?
Mark Zuckerberg: Yeah. We’re starting off with just Facebook and messenger. The next version that we’re going to do is more basic services on top that. But, you know, because Facebook is so much of what people use and so much of the data that, or at least the time that they’re spending, once we can make a profitable model that works for folks like Globe and others who we’re working with, then, we think it’s going to be a pretty easy problem to solve to add other services like weather, or food prices or Wikipedia or things like that. But also don’t consume a lot of data into the model and deliver this whole package. But we wanted to start with Facebook because we control it and could work on the upsells inside of it better.
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Globe isn’t the only company that we’re working with. In Paraguay, we’ve been working with Tigo and they’ve also seen the number of people who are using data in the internet grow by 50% over the course of the partnership. And the number of people who are using data on a daily basis is growing even more.
Well, I think what we’ve measured is it’s more than 70% up. So it’s, I mean, it’s really early, right? I don’t want to say that we have all the answers on this yet, but the early results were extremely promising. And that’s what I’m excited to be here and –and talking about it. We’re at the point where I think we’ve kind of proved to ourselves that the model can work. And we don’t have a lot of capacity to work with a lot of new companies yet but what we want to do is try to find maybe three or five more partners who we can work for the next year on to deliver this and deliver the package of kind of all basic services for free as this on-ramp to the internet to – and then hopefully if we can do that, then we’ll be back here the year after that, the year after that with a program that can work for everyone.
David Kirkpatrick: Okay. So the way it works is you give customers who otherwise might not be able to afford it, essentially, free access to Facebook and other services like Wikipedia, basic search, weather information, et cetera.
Mark Zuckerberg: Mm hmm.
David Kirkpatrick: So how do they make money from that? I mean, that sounds like a great thing for people. People would want to use it clearly, I can see why they’d come on board for that but what’s the long term promise for the operator? Why would they want to partner with you?
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Mark Zuckerberg: So it goes back to this question of why is the next two or three billion people who are going to get access to the internet, why are they not on the internet today? And it’s not because carriers aren’t in their zones. Right? I mean 80% of people or more are — live in areas where there’s 3G or 2G coverage.
The reason why they’re not on is because even though a lot of them have the money to afford it, they don’t know why they would want to get access to it. But for people who know what basic, like, there are some services that people know and people know Facebook. They know WhatsApp, right?
So, if you ask someone, “Do you want a data plan?” they might say “I don’t know why I would want a data plan” or “Why I should spend my dollar or two of disposable income on that”. But they – but if you said “Do you want Facebook?” then they’ll say “Yeah. I want Facebook.”; “Yeah I want WhatsApp”. So, once people have those things for cheap or free then through those services, they come across all these other things that they want to consume like news, apps, different media and then it becomes…
David Kirkpatrick: So, it’s a kind of gateway (drug) (so to speak)…
Mark Zuckerberg: Yeah. It’s – we think about it is an on-ramp. Right? So, it’s kind of, and we think it’s sustainable so…
David Kirkpatrick: Better an on-ramp than a gateway drug. But the point is it leads to further consumption. Yeah.
Mark Zuckerberg: Yeah and it kind of – but the important thing is that it shows people why it’s rational and good for them to spend the limited money that they have on the internet. Which I really believe it is actually the rational thing for them to do. All the data and studies that we’ve shown showed that it will not only increase their opportunities to find jobs and health and education and all these things that makes the economy better. And if we do this as an industry, it will also, for self-interest, just to increase the profits of all the different companies that were involved here
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and allow us to invest more in building out the infrastructure to deliver even better internet to people a lot sooner than we’re on track to as an industry without doing something like that.
David Kirkpatrick: So, did you work with Globe suggest that they really make more money as a result to this thing?
Mark Zuckerberg: We’re on our way. Right. I mean, I think there is, you know, we’ve been doing this for only a few months now, so I mean, that’s kind of — I think makes it even more impressive that the number of people using data in the internet in the Philippines is doubled on their network in just I think the three or four months that we have.
We’re near breakeven and still have a bit of work to do but we are very early in tuning this. And this is a lot of what these partnerships are. Where just we want to – we work with folks and early on it starts off and it’s not tuned and you’re going to spend a little bit more than you’re making upfront. But from what we have seen in the rate of improvement, we’re highly confident that we’re going to get us to a point where it’s going to be very profitable for us.
David Kirkpatrick: Okay. So, be more specific of what you want from carriers because there’s nothing if not carriers at Mobile World Congress. So, you got the right audience but what do you want them to do if they were to work with you? What would it be like to work with you and what can you do for them specifically?
Mark Zuckerberg:I just want to do a share the vision, get people starting to think about this. We don’t have capacity to work with a large number of partners at this point but we want to work with a few more. So, maybe three or five more partners to, you know, if the first step was testing just a couple of basic services then what we want to trial over the next year is the full kind of vision. Right? So, all of the different services that we talked about with all of the different kinds of upsells and things that we think that we have the ability to do if we worked with a carrier deeply and plug in to their systems deeply to make all these flows really efficient and use all the knowledge that we have about costumers that both we and the carrier have.
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So — and we basically allow the arrangements that we’ve had with folks, you know, we’ll test something out for a couple of months at a time. We’ve been really lucky with some of the partnerships that we have and we mentioned Globe and Tigo and there are a handful of others that, you know, there have been longer term partnerships that give us the ability to test things. And even if they don’t work in the first month to kind of keep on pushing and getting them to work over three or five month’s period.
What we want to do for the next sort of partnerships is kind of have a year-long period where we’re really diving in together with a couple of folks to see how far we can push this and make this model work. And my goal would be to show that the work – that the model works in full over the next year and then to be back here either next year or the year after with the systematic program that we can roll-out to everyone who wants to work with us at that point. But for the next year, we’re really just looking to work with, you know, maybe three or five companies who are really serious about trying to connect everyone in their country using free basic services.
David Kirkpatrick: Okay, if they’re giving free access to Facebook, that’s good for you. Sounds like you could make some good money from that. So with this…
Mark Zuckerberg: You’d be surprised.
David Kirkpatrick: Well, is this just a way for Facebook to make more money basically then? I mean, what is the reason why Facebook is doing this?
Mark Zuckerberg: So, over the long term I hope. But I mean one of the unfair economic realities is that the people of the vast majority of the wealth in the world are the billion people who’re already on Facebook, right? So, when I talked about this
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with my Board of Directors and I put it in front of them a budget to spend billions of dollars on trying to get Internet.org and this vision to work over next few years…
David Kirkpatrick: Mmm. (Inaudible).
Mark Zuckerberg: I mean, they rightfully asked me “Okay. Well, how is this got to be profitable in the near term?” And I cannot construct any model that’s going to add up in the near term. Right?
David Kirkpatrick: Mm hmm.
Mark Zuckerberg: Because the ad markets in these countries don’t really exist in a huge way at that is got to make us be breakeven on this over any period of time that we typically make investments. But I believe in this because I mean, first of all, this is why I started Facebook. Right? I — I mean, I, I’m…
David Kirkpatrick: Well, like I said you have a long term view would go on.
Mark Zuckerberg: Yeah and I built the product originally because I wanted it at Harvard. But I mean the — the vision was that someday someone should try to help connect everyone in the world. And reaching a billion people ourselves was really this moment for us where we took a step back as a company where like, “All right, what are we really here to do?” Right?
If we can help connect the billion people, are we going to spend the next few years getting to 1.1 and then 1.2 and 1.3? Yeah, we’ll do that. Right? Because we’ll do that on the way to something else. But there’s got to be something bigger and for us it’s really this vision of connecting the world.
And, you know, when I think about the vision for Internet.org even though I think we’re probably going to lose money on this for a quite a while — all the different things that we’re doing. The reason why I’m optimistic is just like social networking early on, the reason why we did it even though all these bloggers and I never really cared about that. I believe that it was just this important thing and I couldn’t connect all the dots going forward. I didn’t know enough about the world or business to do so but I just felt, you know, this is an important thing. Right? And if we do something that’s good for the world, then eventually we’ll find a way there to benefit from that in some way.
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And I kind of feel like that around Internet.org as well. There’s no clear plan that I can say today it’s like, okay, “This going to be good for Facebook.” But I think it’s clearly good for the world and like every metric of good for the economy and global health and people in these countries and everything. I think you can see that.
And over time I think if we can deliver this then it will probably be good for us over time as well.
David Kirkpatrick: Is your board completely cool with that?
Mark Zuckerberg: Yeah. Because I mean, they’re on our board because they believe in our mission.
David Kirkpatrick: Okay. Good. But you are kind of an unusual company because of the scope of your presence globally. I mean, I guess it’s an unusual position to be in where if internet access increases, you benefit just because such a huge percentage of users of the internet use your service.
So, what kind of trajectory would we see this to be on? I mean, how long do you think it will be before we could potentially if, you know, say everything went right and all the partnerships work and you really got what you wanted. How long before everyone could have basic services? Not streaming Netflix but Wikipedia and this weather information.
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Mark Zuckerberg: Yeah. Well, what I hope is that we can prove that the model works and then get to a place where we can work with a larger number of carrier partners within the next two or three years.
And then within — after that, that’s when I think a lot of the hard work will actually begin of rolling it out and working with the carriers to do that which is really when I think you’d start to see many more folks get on the internet. So, this is a long-term thing for us, I mean, this isn’t something where we think we’ll figure something out and then like in six months we’ll start to see internet numbers grow dramatically.
But I think if we can do this well as an industry, then within five years, I certainly hope the number of people that we’re connecting is a lot more than the billion that we put, that that someone put in the video that played right before you and I came up here and I’m like, I would hope that, you know, in the next ten years we can really make progress at connecting most of the rest of the rest of the world. You know, whether that’s 2.5 or 3 billion people.
David Kirkpatrick: Okay. Well, let’s go back to this subject we started with WhatsApp. Because, okay, you said it was primarily in order to help fulfill this vision. But you paid $19 billion for it. I guess trying to put myself in the head of your board here, right? You know, they do probably agree with you that long term, making the world more connected and open is a great thing, but then, they’re numbers people, a lot of them. And you know, that’s a huge investment you’ve just made and I — it sounds like the return is very long term. But is it really the right way to think of WhatsApp? Because it’s not the way it’s been discussed…
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Mark Zuckerberg: … incredibly valuable, much more valuable than that. So I mean, there’s chance…
David Kirkpatrick: And they’re halfway there already, right?
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Mark Zuckerberg: I could be wrong. I mean it’s like if there is some chance of this is, you know, the one service that gets to a billion people and ends up not being that valuable, I don’t think I am.
I think, you know, you can look at other messaging apps that are out there, you know, whether it’s Kakao or Lime or WeChat, that already are monetizing at a level of $2 to $3 per person and with pretty early efforts. And I think that that shows that if we can do a pretty good job of helping WhatsApp to grow, that this is just going to be a huge business. Right? So even just independently, I think it’s quite a good bet.
Now, then the question is why were we excited to do this together? So I was excited and Jan was because of the Internet.org vision and helping to connect everyone in the world which I think clearly we can do, you know, a lot of leverage from working together on that.
The other piece is that by being a part of Facebook, it — it makes it so that they can focus for the next five years or so purely on connecting more people. Right? If they did this as an independent company, they were going to have to focus at some point more on building out their business model – which of course they’re going to do – and they already have seeds of that with their subscription model which is very promising.
But you know what Jan is more excited about and frankly what I think is the bigger opportunity is rather than focusing on that for them to go out and connect one, two, three billion more people in the next, I mean however long that’s going to take. And if we can do that, then I just think we’ll be well on our way to both realizing this vision of trying to connect everyone and on our way to helping to achieve the Internet.org vision. So that’s where we want our focus on.
David Kirkpatrick:you also think of messaging as part of the basic services that ought to be available to everybody long before they can download video. Nows just a human fairness issue, something you want to help make happen and also that would benefit Facebook in the long run.
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Mark Zuckerberg: Yeah. And to be clear, I mean, what we envision for carriers is basically a model that can help them get more subscribers and connect more people. It’s going to be up to them to choose which services they want to put in the basic services for free. I mean, I think that there are certain things that would, that people really want, right? That they’re going to want to include in there. But I think it’s like, our model and what we’re trying to build is just a proof that building an on-ramp is better for the internet and better for our partners.
And I think that we’re kind of, quite on our way to proving that out. And then you know, over time whether people want to include WhatsApp in that or Facebook Messenger or Facebook or whatever the pieces are. I think it’s something that we can work out and something that they’ll have a lot of choice ever.
David Kirkpatrick But also, you know, you know, it reminds me a little bit of the Open Compute Project you have which is a way of taking the software that you’ve developed in your data centers which are among the largest in the world. And making that freely available to the rest of the internet industry which is bringing efficiencies to others. So talk about specifically how you’re going to be able to make efficiencies that allow them to make money even though they’re giving away these services for free.
Mark Zuckerberg: So there are three pillars that we’re really focused on in terms of efficiency and the first is kind of just decreasing the overall cost of all the infrastructure that goes into delivering the internet. Right?
Then second is decreasing the amount of data that’s used, right? So, you’re not utilizing most of that infrastructure for these basic services. And then the third is increasing the efficiency of all the upsells and things that we could to increase revenue for folks.
And I think that there’s a 10X improvement in each of those. And if you compound those together then that adds up to about a thousand X improvement and the affordability of some of these services which I think if we can deliver that then we’ll be way on our way to making this model profitable for folks and something that I think folks are going to want to use.
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So, and I can go through each of those. All right? So…
David Kirkpatrick: Well so part of it though is also allowing apps like Facebook and other apps that just simply use less data while delivering the same thing.
Mark Zuckerberg: Yeah, yeah. That was the (inaudible).
David Kirkpatrick: Good. Right. Now, you did that with your own Android app like…
Mark Zuckerberg: Yeah.
David Kirkpatrick: …did some amazing improvements, right?
Mark Zuckerberg: Yes. Let me to get through all of the pillars. So I mean, so the first one, you know, decreasing the cost of your overall internet. You get things like open computing there, right, making it so to that the servers and the switches and things that people need that are infrastructure are just cheaper to use by making some of the stuff open source. You get policy work to make it so that you can reuse different parts of spectrum and that the spectrum and licensing fees that carriers have to pay are less overall. There’s work that’s going into helping make smart phones cheaper because that’s a big part of the consumer end in cost. And all those things are things that are widely going on across the industry.
David Kirkpatrick: Mozilla just announced the $25 smartphone capability today.
Mark Zuckerberg: Yeah. It’s awesome. It’s awesome.
David Kirkpatrick: $25, which is pretty good.
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Mark Zuckerberg: Well, this is a lot of what we’re working with, you know, folks like Ericsson, and Qualcomm, and Samsung, and MediaTek, who are Internet.org partners founding partners on trying to do. So that’s kind of the delivering the internet more affordably.
The second pillar is using data more efficiently and this is where I think we’ve actually almost got all the way there towards the 10X improvement that I was talking about where, you know, a year ago, the basic Facebook app, the average person used about 14 megabytes of data a day because…
David Kirkpatrick: This is global average?
Mark Zuckerberg: Yeah.
David Kirkpatrick: Yup.
Mark Zuckerberg: Because we hadn’t, you know optimized the…
David Kirkpatrick: Fourteen megabytes only.
Mark Zuckerberg: Yeah. The quality of the photos to be optimal for different folks and just a lot of things that we know were fairly wasteful. I think we’re already down to around two megabytes on that and we have a pretty clear plan to get to one and a lot of what we’re doing…
David Kirkpatrick: Oh. Without the experience being that different?
Mark Zuckerberg: Yeah. We’re not changing the experience at all just a kind of optimizing and focusing on this. And then we bought this company Onavo which does clients side compression. So that allows a person to route all their internet traffic through them and make it so that they can save I think in some cases its 50% of data cost go through that so that doesn’t just apply to Facebook services that’s everything.
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And there are other things like the Snaptu platform that we have for building really efficient, low-end smartphone and future phone apps as well that we can use as a platform to allow other apps as well. So that’s going to be a big thing.
Then the third pillar is a – is making it so that we can just increase the amount of upsells to subscriptions that people have when they’re using these basic services. And that’s a lot of the work that we’re doing with carrier partners already. And we’ve seen I think maybe even more than a 10X improvement on that piece already. But – and the thing that’s most promising is that there still so much more room there.
David Kirkpatrick: Talk more about how that would work though, these upsells. I don’t understand exactly what you mean by that.
Mark Zuckerberg: I mean you just make it so – so I have an example is, you know, you’re using Facebook feed and you come to a link to something that it isn’t included in the basic services package and you click on it and then there’s just a really kind of – there’s a pop up that shows up right there that just says, “Okay. Well, if you want to consume this, then you should buy this data plan.” And you make it one tap because it’s tied directly into the carriers’ systems where, it’s like you need…
David Kirkpatrick: You know, pay ten cents…
Mark Zuckerberg: Yeah. Exactly.
David Kirkpatrick: …and see this video essentially.
Mark Zuckerberg: Where, so you can – and the more friction we can take out of that process, the easier it is and the more that people will want to buy data through things like that. So…
David Kirkpatrick: So that’s where the incremental revenue can come.
Mark Zuckerberg: Yes.
Time Code: 0:30:32.7
David Kirkpatrick: Or the savings are coming on the other side…
Mark Zuckerberg: Yup. Exactly.
David Kirkpatrick: …because the carriers will be actually delivering less data for the same quality of service. Okay. Talk a little bit about this Ericsson Lab that you just announced today where you’re going to have a lab on the campus at Facebook in Menlo Park to help other apps do this, right?
Mark Zuckerberg: Yes. So one of the things that we want other developers to do is feel empathy for the high data consumption experiences that they’re creating. So we did this Hackathon recently that Ericsson hosted and a bunch of other great companies were there. I think Spotify, and Ebay and Twitter and a handful of others were there.
David Kirkpatrick: They brought their apps to try them out.
Mark Zuckerberg: Yes, so what Ericsson did was they build this infrastructure – they brought this infrastructure to make it that developers could stimulate running their apps on all kinds of different conditions. And when you feel that, you really like get this feel for, okay, I really need to take a lot of the data use out of this because it’s just unusable on all these places.
And once these people who are running these companies have these first hand experiences of experiencing their app in that condition which, I mean, a lot of folks in the US, in Silicon Valley just never traveled around and seen apps on those environments. You really come away with empathy for what you’re subjecting the people who you’re supposed to be serving to like what a bad experienced that can be.
David Kirkpatrick: Yeah.
Time Code: 0:31:46.2
Mark Zuckerberg: Which really incentivizes you to make it more efficient and drop the amount of data that you are using which of course saves money all around for consumers and carriers.
David Kirkpatrick: I heard that some of your people were in Africa and they went into a store and bought some Sims and put them in a phone and tried to use Facebook and they found to their shock that it was a much more difficult experience than they expected. Is that right?
Mark Zuckerberg: Yeah. We send – we have this rotational product manager program so a lot of folks who are coming out at a college, we don’t assign them to a team; they rotate around the company and just get exposure to different things. And I think we send all of the rotational PMs to an emerging market to feel what Facebook is like there. And they all come back with really interesting stories of things that were just absolutely messing up and need to do a better job on in order to deliver this well.
But I think it’s like internalizing that empathy in getting that empathy for those experiences in our company I think is what’s going to enable us to really get the push to make these things as efficient as they need to be.
David Kirkpatrick: In a way, the role you’re beginning to play is something like a systems integrator for the internet is sort of what, the way you’re describing it. I mean, you are kind of drawing together all these communities. I know you just announced something today in Rwanda where even the government of Rwanda is involved and you’re helping, and Nokia is going to sell especially cheap phones to students so they can get free access to educational information.
Is this a role that you think Facebook will play more and more to be like a kind of a convenor or systems integrator of all these parties so they can make it happen together?
Time Code: 0:33:10.4
Mark Zuckerberg: You know, I don’t think Facebook should get that much credit for that. And actually one of the things that — that I want to be really clear about. Now, I said this but I don’t think I can make this point strong enough is Internet.org is this big coalition across the industry and we’re playing one role in it. I think Facebook has some unique perspective building the most used app in the world and that gives us some position to be able to really understand what we need to do to deliver these things more efficiently.
But so much more, no one company can do this work by themselves. I mean, this is all, it’s a partnership between the folks building the infrastructure and the carriers and other developers and governments and — and you know, public sector, other work in order to deliver this. So it’s going to be all these folks having to come together to make this possible because there’s just no way that Facebook can do this by ourselves and I think if we came away today with the feeling that this is somehow like my vision or you know, we were doing this, then that was just be completely wrong.
David Kirkpatrick: So the range of partners will grow considerably over the time.
Mark Zuckerberg: Yeah, absolutely. Yeah.
David Kirkpatrick: You know I got to ask you one thing you know, because there’s been so much talk about the Snowden revelations and the impact they’ll have on the American internet companies. So you are, you know, one of the premiere American internet companies talking about even more global penetration where in many countries there is concern that the US government has this weird relationship. Could this potentially be a problem for this – the success of Facebook in the future overseas, globally generally? Not overseas we’re overseas now.
Mark Zuckerberg: Well. So I mean, those revelations, the…
David Kirkpatrick: That’s an American colloquialism.
Time Code: 0:34:42.9
Mark Zuckerberg: …the NSA issues I think are a real issue especially for American internet companies. You know, trust is just such an important thing when you’re thinking about using any service where you’re going to share important personal information. And we continue to work to just make sure that we can share everything that the government is asking with us. And recently, we got the permission to share a lot more of the content in terms of what people are asking which I think was helpful because it showed that, you know, the request number in the thousands, not the millions or tens of millions, like I think some people had feared.
For Internet.org, I don’t know why that would have a huge impact. I think if anything, my guess is that the issues with the NSA actually have the industry working together better than I’ve ever seen it working together before. We’ve had issues historically working with some of our competitors on policy issues.
David Kirkpatrick: Because you’re so collectively angry, it brings you together, is that it?
Mark Zuckerberg: Uhm…
David Kirkpatrick: (Is that it)?
Mark Zuckerberg: Yeah. I mean, what I was going to say was, you know, in the past I think we’ve had issues just because we’ve been competitive aligning on policy issues that even helped the whole industry — things around pushing the internet forward or internet policy issues.
But now I think it’s just – it’s such an important thing because of how just like how extreme some of the NSA revelations were that now I do feel like a lot of the industry is a lot more aligned. And then being able to work together on things like Internet.org, once you’re already working together on a few other things actually become easier in a lot of ways.
Time Code: 0:36:14.0
David Kirkpatrick: But given the vision you’ve said today that you have about connecting the planet, it must make you pretty angry because certainly the government’s behavior has undermined trust in these American services.
Mark Zuckerberg: Yeah, I mean it’s not awesome.
David Kirkpatrick: It’s not awesome?
Mark Zuckerberg: I mean it’s…
David Kirkpatrick: That’s just an under…
Mark Zuckerberg: …I’ve said…
David Kirkpatrick: …understated way to respond…
Mark Zuckerberg: I’ve talked about this a lot publicly.
David Kirkpatrick: Yup.
Mark Zuckerberg: I don’t have much new to say now but I mean, what I’ve said is that I think that the, you know, the government kind of blew on this. I mean they, you know the governments all have a responsibility to protect folks and to also be transparent about what they’re doing and I think that they just were way over the line in terms of not being transparent enough about the things that they were doing.
And now I think that they’re getting there because of the pressure and a lot of the work that internet companies are doing to push. But they’re only now starting to get to the range of where they should have been. And I really think this whole thing could have been avoidable and it would have been a lot better for the internet.
David Kirkpatrick: Okay, I think we have time to take a few questions. So, we have mic handlers I believe I can barely see anything out there. But what we’re going to do is take a few questions at once and then Mark is going to answer them. We don’t – I don’t have a timer up here so I’m a little unclear about how much time I have. So any help I can get on that would be useful.
So, okay let’s start right here and if you’d identify yourself and state your question please.
(Marcus Mohammad Gianni): I am (Marcus Mohammad Gianni), I’m from the Bay Area as well. Just a quick question. I love your vision but what is the role of the literacy in all of these?
David Kirkpatrick: Okay good. Thank you for that one. Okay we’re going to take one or two more. Okay right here in the front row. Could we get the mic right here? Ops, please let him (by this side).
Reza Jafari: (Inaudible). My name is Reza Jafari, I’m from the UN Broadband Commission. That is a fantastic idea. I’m hearing on the tone of this conversation there’s a lot of collaborative innovation, collective innovation, or haven’t hear it for you saying that because it sounds like that this is going to be really the essence of being able to pull this thing together.
And in a couple of hours as you know, Stephanie Powers, the Ambassador of US, Ambassador at the UN is going to introduce her own Facebook for reaching out to (about a billion) or so I’m sure you’re going to be joining him or joining her from here. What about the role of the NGO’s and the governments being able to participate at this point. Making it public-private partnership collaborative innovation?
David Kirkpatrick: Oh that’s a great one. Okay, we’ve got one over here.
Man: Hi Mark, I’m a journalist from the Netherlands, right here. I have a question about WhatsApp. WhatsApp has a lot of contents and data in the messages currently not really used at least not in the way that Facebook uses a lot of those data. Are there any plans to change that — is my question.
David Kirkpatrick: Okay, let’s start with the role of NGO’s and governments because that’s, you know, really a key question that I was eager to hear you talk more about anyway.
Mark Zuckerberg: So I think that this is – the internet is not something that any one company or even one sector of companies or organizations works on. I mean, this is going to be something where there are going to be carriers and app developers and infrastructure providers and governments and NGOs and a lot of different types of folks.
And Facebook’s role in this is not to, I mean, we’re not organizing all the pairwise connections between those. I mean a lot of collaborations is going on and what we’ve tried to do is help to create this Internet.org umbrella framework that aligns the mission – and a lot of the work that a lot of these folks were already trying to do and say okay, these are the companies that are trying to do this work and I think it’s enabled a lot of different conversations that wouldn’t have happened otherwise.
So, one of –the things that we see is, you know, for folks who are trying to build new kinds of infrastructure, they often need partners to help deploy it and get it out to different places whether that’s companies or NGOs who are working on that — that I think that there’s a wide variety of options. And, you know, I think that there are handful of things now I don’t know what’s public yet. So I probably don’t have as good of an answer here as I should. But I think that there are going to be a number of things pretty soon that show pretty good partnerships that are in public-private partnerships.
David Kirkpatrick: Okay now it’s – a lot of people in Northern Europe in particular would ask the kind of question that the Dutch journalist asked about and now that you’re going to own WhatsApp, is your attitude towards its data going to change from the attitude they’ve had historically and the user information, what would you say about that?
Mark Zuckerberg: Yeah. The answer is it’s absolutely not going to change. You know, one of the big important pillars of this deal is that WhatsApp is going to continue to operate completely autonomously. They’ll use the services from Facebook whether that’s, help scaling in different tools or different infrastructure or help using the people at our company to grow different functions within the organization. Whatever Jan wants to use, he’ll have the ability to use.
But the vision is to keep the service exactly the same. And as you probably know, you know, WhatsApp not only do they not use any of its content, they don’t even store it. Right? So, if you send a message to someone, that message is deleted from WhatsApp servers almost as soon as it’s delivered to them.
So all the photos and things that you’re sending, WhatsApp isn’t even storing. They’re, they just – are you building this infrastructure to deliver it efficiently and reliably and they found that– that’s the most important thing — is focusing on that efficiency and that’s the service that people want. So I think we would be pretty silly to get in the way of that.
David Kirkpatrick: Okay, just quickly, the literacy thing, is that something that you care about? Do you think this could really help? This – the initiative?
Mark Zuckerberg: Yeah! I mean, I think we have a long wide, well, while to go before running up against people…
[Audio break]
…or, you know, photos even if they’re not super high res photos are pretty universal forms of communication that I think you’re just starting to see more and more. Even in populations that are highly literate are what is being – what people are using to communicate because they’re just more efficient a lot of the time.
David Kirkpatrick: Okay good. We have time for a couple more. All right. Well, I can see the front really easily. Go ahead. Do you have a mic? Sorry. Mic’s coming. Am I supposed to – okay, I’ll go to you next and then…
(Dinish): Hi Mark. My name is (Dinish).
Time Code: 0:42:40.6
David Kirkpatrick: …go to you. Yeah.
(Dinish): So many are inspired by a vision of Internet.org. As we think about connecting everyone, really you have to think about countries which have large (amounts) of humanity, just like China and India. So do you have a specific thinking or a strategy towards those big chunks of humanity which is in these countries who may not have access to internet or communication at this point?
David Kirkpatrick: That’s a good one. And right behind there, number four. Can we get that one? Do you have a question? Okay no, somebody over here has a question right?
(Bruno): Hi.
David Kirkpatrick: Yup.
(Bruno): Yeah. Hi. Hi Mark. Welcome to Barcelona.
David Kirkpatrick: Hi.
(Bruno): My name is (Bruno). I’m a journalist and I want to ask you if you are creating what’s next? What idea do you have right now in your mind that you will put in 2020. Let’s say Facebook and which is going to be the key to help the world to be a better place?
Mark Zuckerberg: This isn’t enough for you?
David Kirkpatrick: Just to connect the whole world. There’s one more over there. I can’t really see but you tell me – just tell him to go. I can’t…
(K Van): Hi Mark. What’s up? Are you going to – this is (K Van) from Silicon Carne. Are you going to do another bid on Snapchat or you already given up on that?
David Kirkpatrick: [Laughs] Okay well. Respond as you see fit. We have just a few little bit of time remaining.
Time Code: 0:44:04.5
Mark Zuckerberg: Yeah. What is the first question? I – the Indian Times.
David Kirkpatrick: Yeah.
Mark Zuckerberg: We think that the model that we’re building and working towards here is pretty universal. So I don’t think – what we’ve tried to optimize for so far is partners who believe in this and want to work with us on it. Right?
Because it will take investment, right? We’re not just going turn this on and then in the first month it’s going to be this massively profitable thing. It’s going to take a while to grow the internet in the country and to then turn the people who are not on the internet into subscribers who were paying. And we think that we can get there. But it’s going to take some investment. So what we’ve tried to do is to focus on folks who believe in what we’re trying to do and working deeply with those folks.
China’s a little challenging for us because we’re not running there. So our ability to work with different folks there is more limited. But again, a lot of what Internet.org is — is trying to put forward this model for how this can work and there’s no reason why. If we show this can work in different places, that different companies that are running in China can pick up the ball and run with us there, I would love to see that happen.
David Kirkpatrick: Any comment on Snapchat?
Mark Zuckerberg: No.
David Kirkpatrick: [Laughs]Why am I not surprised? I think, I think we…
Mark Zuckerberg: I mean look…
David Kirkpatrick: Where is (Bruno)? (Inaudible)…
Mark Zuckerberg: It’s, look, once you do, after buying a company for $16 billion, you’re probably done for a while.
Time Code: 0:45:26.7
David Kirkpatrick: In your case, I am never sure. But okay. Mark, thank you so much.
Mark Zuckerberg: Fair. Fair, fair, fair.
David Kirkpatrick: Thank you so much for being here. Really good talking to you.
Video Source: https://www.youtube.com/watch?v=VHwkHZpXqWc