Facebook Chief Executive Officer Mark Zuckerberg has a big, expensive goal: to connect the world to the Internet. He spoke with Emily Chang about his plans, after returning from a trip through Southeast Asia and India last year as part of his Internet.org initiative. The interview airs Feb. 19 on Bloomberg Television’s Studio 1.0. The transcript below has been lightly edited.
You are a year and half into this. Tell me your vision; tell me what inspired you to do this.
Zuckerberg: When people are connected, we can just do some great things. They have the opportunity to get access to jobs, education, health, communications. We have the opportunity to bring the people we care about closer to us. It really makes a big difference. The Internet is how we connect to the modern world, but today, unfortunately, only a little more than a third of people have access to the Internet at all. It’s about 2.7 billion people, and that means two-thirds of people don’t have any access to the Internet. So that seems really off to me.
There are all these studies that show that in developing countries, more than 20 percent of GDP growth is driven by the Internet. There have been studies that show if we connected a billion more people to the Internet, 100 million more jobs would be created, and more than that would be lifted out of poverty. So there is just this deep belief here at Facebook that technology needs to serve everyone. Connectivity just can’t be a privilege for people in the richest countries. We believe that connecting everyone in the world is one of the great challenges of our generation, and that’s why we are happy to play whatever small part in that that we can.
What has been your single greatest achievement, and what has been your biggest setback?
The last period has mostly been about learning. We’ve been working on this for a few years so far, and what we’ve really learned is that there are a few major barriers to connectivity, and they are not necessarily what you would have thought of upfront. The first one is that a lot of people just don’t have any access to a network, so it’s a technical barrier. So even if they had a phone and could pay for data, there would be no equivalent to a cell phone tower near them to access that. That’s what a lot of people think about when they think about not having connectivity, and there are projects like satellites and drones and things like that that we are working on that can create connectivity and solutions in areas where they aren’t today. And that’s important. But it turns out that’s actually a pretty small part of the problem. Only about 15 percent of people who aren’t connected aren’t connected because of a technical barrier
The next barrier is affordability. And a lot of the people who have access can’t afford to pay for it. So the solution to that is to make it more efficient. Make it so the network of infrastructure operators are using is more efficient, so the apps people use consume less data. And there’s a lot of work that is going into that. You know, we’ve made the Facebook app on Android, for example. I think it uses about five times less data than it did last year. So that directly goes to being cheaper for people to use, and we’ve made a bunch of these tools open for other people to use as well.
But it turns out that the biggest hurdle isn’t technical or affordability—it’s the social challenge, where the majority of people who aren’t connected are actually within range of a network and can afford it, but they don’t know what they would want to use the Internet for. And that kind of makes sense if you think about it. If you grew up, and you never had a computer, and you’ve never used the Internet, and someone asked you if you wanted to buy a data plan, your response would be “What’s a data plan, and why would I want to use this?” And I think that ends up being the biggest challenge and one where we can create the most value and help people out the most by giving people some free basic services by working with operators and governments and helping people understand what they can use the Internet for, to on-ramp for everyone.
Facebook is a for-profit company. Why call it Internet.org? Is this a nonprofit? Is this a charity?
If we were primarily focused on profits, the reasonable thing for us to do would really just be to focus on the first billion people using our products. The world isn’t set up equally, and the first billion people using Facebook have way more money than the rest of the world combined. So from a biz perspective, it doesn’t make a whole lot of sense for us to put the emphasis into this that we are right now. The reason why we are doing it is two things. One is mission. We are here to help connect the world, and we take that really seriously. You know, you can’t even do that if two-thirds of the world doesn’t have access to the Internet. We just turned 10 as a company, and we decided that in the next 10 years, we want to take on some really big challenges in the world, like helping everyone get online. And that’s just an important thing for us and, I think, for other Internet companies in fulfilling this mission overall.
In the long term, I do think it could be good for our company, as well, if you look at it in a 10-, 20-, 30-year time horizon because a lot of these countries and economies will develop, and over time will be important. But most people who are running businesses don’t make investments for 30 years down the line in terms of products that they are going to build.
Do you have a better idea of when this will become profitable?
No, I don’t have a better idea. The reality is just that a lot people can’t afford to pay for data access in some of these areas; then they probably aren’t ad markets, and it’s probably not going to be a place where it’s going to be particularly profitable in the near term. In fact, we’ll probably lose a bunch of money—just because supporting Facebook as a service, and storing the photos and content that people want to share, costs money. We probably won’t offset it by making much. But there’s this mission belief that connecting the world is really important, and that is something that we want to do. That is why Facebook is here on this planet.
“It’s probably not going to be a place where it’s going to be particularly profitable in the near term. In fact, we’ll probably lose a bunch of money”
And then there is this longer-term belief that this is going to be good for these countries if people have access to these tools, and over time, if you do good things, then some of that comes back to you. But you just have to be patient, and you can’t always know what the plan is going to be upfront.
You’ve said connectivity is a human right; you want to do good things. If that’s the case, why not just give access to the complete Internet? Why just a few apps?
Yeah, it’s a good question. So it comes down to the economics of how this works. It turns out that most of the Internet consumed is rich media, especially videos. So if you look at things like text, text-message services like search or Wikipedia, or basic financial or health information, can be delivered relatively cheaply and can consume less than 1 percent of the overall infrastructure. So if you are thinking about building something that operators can offer for free, it needs to be pretty cheap for them to do. And we’ve basically figured out a series of services that people can offer, and it actually ends up being profitable for the operators. The model that we consider this to be most similar to is 911 in the U.S. So even if you haven’t paid for a phone plan, you can always dial 911, and if there is a crime or a health emergency or a fire, you get basic help, and we think there should be an equivalent of this for the Internet as well—where even if you haven’t paid for a data plan, you can get access to basic health information or education or job tools or basic communication tools, and it will vary, country by country.
For example, when we launched in Zambia, there, you know, HIV is a really big deal. So one of the services that the government and folks wanted to include were services so you can learn about HIV, learn about different aspects of maternal health. That ended up being very important. And in different places, there are going to be different tools that are important for this kind of 911 for the Internet.
We’ve spoken to ad executives who are excited to advertise on Internet.org. How does that benefit users?
I’m not sure it’s a big part of the solution in the near term, to be honest. What we need to do is work out a model with operators and governments and local partners that is profitable for them so we can continue growing the Internet. What we have found in some of these early countries that we have worked in—Indonesia, the Philippines, Zambia, Kenya—is you offer a little bit of the Internet free, and more people start using data, and more people can access the Internet and access these tools, but also more people start paying for data once they understand what they would use the Internet for. The people understand why they would want to pay for data, and these operators end up making more money, and it ends up being more profitable, and it ends up taking that money and reinvesting that in better Internet and infrastructure for everyone in their country. So that ends up being very important, and a lot of what we have focused on for the past couple of years is just: How do you build a model that is sustainable for everyone and delivers free Internet to people?
Originally, we thought that maybe working with other kinds of partners would be important, but at this point, we think we have a sustainable model that is working in multiple countries now, and there’s a lot of momentum and a lot of countries coming online now, and a lot of other countries are coming to us to roll out the Internet.org model. So I expect to see a lot more over the next year.
Does that mean no advertising?
In a lot of these countries, there isn’t a very big ad market yet. So it’s not that we won’t do it eventually, but for right now and our business, the main thing that we need to continue to do is focus on the quality of the ads and doing that in the developed world—in the U.S. and Europe and Asia and a lot of places that are actually going to be the driver of our own profitability and revenue—not trying to make ad markets out of countries that are just coming online.
Now, once you get people connected and once you have that power, how do you use that power?
For us, it’s all about enabling people. We worked with Airtel in Zambia. They were our first partner to roll out the suite of free basic services. And within weeks, we started hearing these pretty amazing stories coming in of people using the Internet—an expectant mother using the Internet for the first time to look up safety and health information for how to raise her child; a poultry farmer using Facebook and setting up a page in order to sell multiple times more chickens than he had been able to before; a university student using the Internet, using Wikipedia to look up information and save money on books that she needed for an exam. It’s pretty crazy.
What kind of data are you collecting about these users, and how do you use that data?
I don’t think it’s anything different than how people use Facebook normally. The biggest thing we’ve had to do to make Internet.org work is connect with the different operators in these countries—for example, Airtel in Zambia—to make it so people have a very easy way to go buy data when they want to do more things.
“There are going to be different tools that are important for this kind of 911 for the Internet”
For example, you might be browsing Facebook and see a link to news, or you see some video that you want to watch—that can’t be covered for free, but we make it so if you tap on that, it’s very easy to online pay, and that’s good for everyone. It makes it so people can discover why they would want to consume content on the Internet. It makes it so Airtel and our partners can make more profits, and continue investing, and building out a faster and broader Internet, and it gets everyone online.
Google is working on Project Loon and Google Fiber. What do you think of Google’s approach?
Connecting everyone is going to be something that no single company can do by themselves. So I’m really glad that they and a lot of other companies are working on this. Internet.org is a partnership between a number of different technology companies and nonprofits and governments. There are companies that are doing things that are separate, and that’s going to be necessary, right?
Have you had talks with Google about partnering with them? Would you ever partner with Google?
Yeah, our team is in contact with them frequently, and I talk to a number of folks over there. When we launched in Zambia, Google was actually one of the services that was in the Internet.org suite, and that’s valuable. In addition to health services and education, jobs and different government services and communication tools, people need to be able to search and find information. And whether we work with Google or others on that in all of these other countries, I think that is an important thing. I’d love to work with Google. They are a great search product.
Bill Gates criticized Google’s Project Loon. How do you respond to that?
Yeah, Bill and I have had a few conversations about this and other things that we have worked on together. And I think the reality is that people need a lot of things in order to have good lives, right? Health is certainly extremely important, and we’ve done a number of things at Facebook to help improve global health and work in that area, and I am excited to do more there, too. But the reality is that it’s not an either-or. People need to be healthy and be able to have the Internet as a backbone to connect them to the whole economy. The Internet creates jobs. It actually is one of the things that facilitates health.
For example, in the most recent Ebola outbreak, one of the things that Facebook tried to do was we asked a bunch of folks who were involved in containing the outbreak, “What can we do to help?” and the No. 1 thing that they said was “Help us get connectivity because we need to be able to wire up all these different Ebola treatment units to make it so we can coordinate the response, so people know and can count the people who have come into contact with the people who have Ebola.” So it ends up being important. I’m certainly not here saying connectivity is more important than health. I mean, that would be ridiculous, but I hope that we can help out with all of these things over time.
So, drones and lasers—you’ve got a whole, big lab working on this. When will Facebook drones and lasers be ready for launch?
We are going to be testing some in the near future, so I think I’ll probably be mistaken if I give you an exact date on this. But that’s one of the big technical barriers, right? There are a lot of people who don’t live within range of a network, and drones and satellites and communications lasers is one way to do it. Microwave communication is another.
You made it clear on the earnings call that Facebook is going to be ramping up spending. How much of that is going to Internet.org and these efforts—the NASA Jet Propulsion Lab—and where are you working on all of this other cool technology?
We’re definitely investing a bunch in this.
Have you flown a drone yet?
Me, personally?
Yeah.
Well, I think the nature of a drone is the person doesn’t fly it.
In some cases, you pilot it, or you watch it go up?
That’s right. No, I have not.
You have not, OK.
I’ll let our team of experts do that.
We were talking about China. Your Mandarin has gotten pretty good. What’s the likelihood that Internet.org could help you get back into China, get Facebook back into China?
That’s not something that we are focused on right now with Internet.org. There are countries where they reach out to us and say, “Connectivity is a national priority, and a lot of people in our country use Facebook—and if there is a way to work together to do that …” For example, Malaysia—I was meeting with one of the leaders in the government there. Making it so that everyone in their country is connected is one of the top national priorities, similar to Indonesia. It makes sense that we prioritize countries that are reaching out to us actively for this.
How will you judge whether this has been a success?
The goal here is to make it so that a person can walk into a store in any developing country and buy a phone and get access to some free basic Internet service, and that’s the primary goal for people around the world. Once we’ve made it so this system is working in every country, that will be step one, and step two will be making it so that people will use it, which will be its own multiyear challenge, just because the Internet is one of the best ways to teach people about what services are out there.
A secondary goal is to make it so this is a profitable thing for the whole international operator community, because that’s how you make this sustainable. This can’t be something that is just charity for these operators around the world. This will work if providing free basic services actually ends up being a way for them to get more paying customers and more people online, and then they spend more money to invest and build faster networks and reach more people.
The signs that we have from the early countries that we are in suggest that both of those things are true, and that’s what I look forward to over the next 10 years. If we can make it so more free basic services are available in a hundred or more countries and a billion or more people can get connected, then that is going to be a huge win for all of these people who will now have access to information on jobs and health care and education and communication tools that they just didn’t have before.
Source: Bloomberg
