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Mark Zuckerberg and “The Facebook Effect” author David Kirkpatrick met for an on-stage conversation this evening at the Computer History Museum in Mountain View.

Zuckerberg was much more relaxed, less sweaty and nervous than the last time he was on a public stage in the U.S. at the d8 conference in June. He said that to get to Facebook’s next 500 million users, the company is focused on a handful of markets including South Korea, Russia and Japan. He also said the company is working on fixing its issues around creating friend groups.

I live-blogged the event, in which the pair were interviewed by NPR’s Guy Raz. The version below has some paraphrasing.

Q: Can you explain what the Facebook Effect is?

Kirkpatrick: It’s a concept about how this massive social phenomenon is changing the world — it’s about government, privacy, our social lives.

Q: [Question about Facebook’s major milestone today — crossing 500 million users.]

Zuckerberg: The thing that we did to commemorate now having 500 million people — we assembled a collection of stories of people who have used our services over the past years. They’re really kind of amazing; everything from the guy who was the last prime minister of Denmark, who found a bunch of connections on his Facebook page and used that to find jogging buddies. There was another guy in a city in Connecticut who found that one of his constituents needed a kidney and he donated a kidney. The stories range from things that are really profound to things that are more day-to-day and mundane.

Q: Do you ever get freaked out about how powerful this tool you invented is?

Zuckerberg: Well it’s the people who are doing this. What we built is a platform. We didn’t build a system where people are donating organs. We built a system where people can stay connected. Historically, people have had the ability to call their friends up or meet face to face. But until recently, there hasn’t been a good system to keep in touch with all of the other people who are in your life; people that you wouldn’t have the ability to sit down with regularly. That’s the power here — when you build up all of the value of these latent connections. People have always wanted to do these things and we have a tool that lets them do that.

Kirkpatrick: Facebook is literally a platform. It has no content of its own. Everything is created by its own members. It’s a viral system where information flows from person to person with amazing efficiency, if it’s of interest. That is the effect.

Q: How does Facebook fit within the pantheon of great inventions?

Kirkpatrick: I think that anybody who has built a system that has attracted a half billion people in six years deserves a great deal of prominence. The world has changed so fast that it’s hard to put people in places in the hierarchy.

Is Mark more important than Alexander Graham Bell? I have no idea. We’ll find out over time. Facebook will not last as long as the telephone, I can assure you of that. So we’ll have to make our judgments more rapidly.

Q: Do you think Facebook will be around in 100 years?

Zuckerberg: I don’t know. I have no idea how long the telephone will be around.

Kirkpatrick: Do you think it’s a reasonable assumption that Facebook will be a powerful Internet company in 10 years?

Zuck: I hope so.

Kirkpatrick: In 40?

Zuck: I don’t know. The trend we’re operating on now is about helping people share information, which most people 20 years ago did not have the ability to do online. Now everyone can share information about themselves — that’s the trend we’re hoping to push forward. That’s going to be one of the most transformative trends in society.

Kirkpatrick: The pace of change is truly accelerating. Something else could come along. You take the mantra that only the paranoid survive. The reason you make all of these changes all the time that raise privacy concerns is because you’re concerned. You’re scared of all the Twitters and Foursquares of the world that could render you irrelevant.

Zuckerberg: I would like to think we’re more proactive than that.

Q: You have the largest database of personal information in the history of the world. If Facebook were a country, it would be the third most populous in the world. You are the head of a country. One out of every 14 humans has a Facebook profile. It’s extraordinary. Do you remind yourself of this responsibility every day? How do you handle it?

Zuckerberg: The main thing is that we’ve assembled a team at the company that has a tremendous sense of purpose for the world. A lot of people who joined early in the company believe in what we’re doing. If you can give people tools to stay connected and share information, you can create a lot of new experiences. It’s that clarity around what we’re trying to do.

Kirkpatrick: People have a hard time believing that. I don’t think you do a good job communicating that. People challenge me all of the time on this point in the book that Facebook isn’t doing it for the money. I know that you love product and you love engineering. You’d rather be talking to the engineering and product teams — but Facebook is — Facebook’s scale is now requiring a new responsibility. Do you really want to be a leader of a company that requires constant interfacing with governments and regulators around the world? You have to constantly explain what you’re doing.

Zuckerberg: Now that Facebook has 500 million people, a lot of the job has become communicating externally. Those are things you see in a mature company. If we thought that Facebook was a mature company and was anywhere near the end of its development….then maybe those things would overwhelm how fun it has been to build this. We don’t think we’re anywhere near the end.

There’s this massive trend on the Internet. There are all of these different services and apps out there. But I think the thing that’s most interesting to people are other people. That’s why Facebook is a much more engaging app than any other out there. [Zuckerberg goes on to explain the photos app, which was far more successful than its predecessors because it involved tagging of friends.]

We think we can take basically any application and build it around people. If we did that, we think we could build a more engaging application. We can’t build these apps ourselves with two or three people. So we built a development platform. What we’ve seen since then — we built this thing called social plug-ins, where any site can take a line of HTML and drop it into their site. You can go to CNN and you can see which of your friends liked that article. It’s a cool experience. Sites that have used these social plug-ins have seen engagement from Facebook go up tremendously.

We’re seeing industries becoming completely transformed. Games are a good leading indicator. On Facebook, there are real companies like Playfish and Zynga. Zynga on private secondary markets has a market cap that’s half of Electronic Arts with an eighth of the employees.

Q: Facebook has all of this personal information on us — our relationships, marriage, personal photos. What kind of guarantee is there that Facebook won’t sell it?

Zuckerberg: That’s the stupidest thing we could do. The information that people are sharing is increasing so quickly. The amount of content that people had in the system will be a fraction of the amount of information that will be added to the system this year.

Here’s an analogy. Think about Wikipedia. Anybody can take Wikipedia content, fork it and create a rival destination. But no one has done it successfully because Wikipedia isn’t really Wikipedia. It’s a community.

People can take all of their information on Facebook somewhere else. Facebook isn’t the information. It’s a community. People are only going to stay on there as long as they trust us and it’s the best tool out there. People can use the API and take their data to other services. That’s the whole platform strategy we’ve embarked on.

Q: But therein lies the problem. So many developers have come to rely on the platform. You’ve described Facebook as a utility like an electric company. Why shouldn’t it be regulated? Why isn’t it a monopoly?

Kirkpatrick: That’s not what he meant.

Zuckerberg: Think about MySpace. People used it because it was cool and fun. People ask what’s going to happen when Facebook isn’t cool anymore. But I’m not here to build something cool. We’re here to build something useful. Something that’s cool can fade. But something that’s useful won’t. That’s what I meant by utility.

I think we’ve shown that we listen carefully to criticism. We’ve created this open platform and people can take their data to any other service that you want.

Q: In David’s book, you say that people should have one identity. Having two identities is a lack of integrity. But I behave a different way around my family than I do around my colleagues.

Zuckerberg: No, I think that was just a sentence that I said.

Q: Are you the same person right now as when you’re with your friends?

Zuckerberg: Uh, yea. Same awkward self.

The definition is integrity is about [being consistent from one space to the next.]

Q: You’ve pushed this idea of being transparent. Why not keep things private?

Zuckerberg: A core tenet of Facebook is control. We built tools that allowed users to share what they want to with whom they want to. But as we’ve grown, we’ve found that the tools have become more complex. That’s one thing that we changed. We created a master control that makes it easier.

Going back to your question about control. When people feel comfortable sharing information, people feel comfortable sharing more things.

Kirkpatrick: Why doesn’t Facebook make it easier to control group functionality — the church friends, your family, the people you had to friend because you couldn’t say no to? It seems to me you would get more sharing if that functionality was radically improved.

Zuckerberg: You’re right. This is one of the core areas that we need to work on, and we are working on it now. It used to be that sharing with my friends meant private. But now, more and more people have subgroups of friends. That I think is an important case — and we’re cutting at it in a lot of different ways. We’ll have more to talk about later.

I think the key is that people can share with whomever they want. That goes back to the point I was making before. We have a community of people that are an engine for sharing. We’re designing very simple ways to have social interactions that are very nuanced.

Kirkpatrick: [interrupts to talk about privacy settings and friend group features] This is something that Sean Parker believes in passionately. Every time you see a name, you should be able to organize it. You said it doesn’t matter whether people use this everyone privacy setting. But you made this change where you defaulted a lot of users to the everyone privacy setting. I was personally not happy that my “friends only” list was changed.

Zuckerberg: A lot of what we were trying to do was have a simple experience. We didn’t necessarily want to have hundreds of privacy settings. But even if only 0.001 percent of users use a setting, they really, really care about it. We try to think about this. Sometimes we make mistakes. When we get feedback, we try to take that into account. The reason why we made all of the changes is that we look at how people use the site. The site has changed a lot. Early on when we didn’t have a lot of international growth, we had these crazy situations where a whole country would be a whole network. China was a network.

Kirkpatrick: So every person in one of those countries could see everyone else’s profiles in that country?

Zuckerberg: Right, and the funny thing was that people in those countries were far more engaged than people where you could only see your friends’ profiles.

Q: I wanted to ask you about Apple. How much impact has Apple had on how you calibrate your product? A lot of people use Facebook on an iPhone. Will you alter your products to accommodate those users?

Zuckerberg: We already do, which more than 50 percent of people who have iPhones have. Apple is a great platform. In 2004, it was really easy to decide what to build. We were going to design something for a desktop or laptop computer. Now there are iPhones and Android devices, and touchscreen devices. It is really challenging to develop for all of these environments. But it is how people want to use the service, so we spend a lot of time thinking about it.

Q: There was an article about Google considering Facebook as its biggest rival.

Zuckerberg: If you think about it on its face, we don’t build the same products. Google’s market cap is greater than that of all other Internet companies put together. From that perspective, they could see any growing company as a threat. But from our perspective, they don’t have to lose for us to win. More people are using Facebook every day, but it’s not that people are using Google less.

Kirkpatrick: I want to make a point that the iPhone is so vital for Facebook that out of any other company on the platform, they would have the most leverage to compel Apple to make a change in my opinion. Facebook is a huge percentage of total application use on the iPhone. Facebook has leverage if it needs to exercise it.

Zuckerberg: We talked about the Facebook photos service earlier. Users were requesting that feature for a long time. So we thought about building a decentralized system that could plug into web server and people could host their own photos. But we couldn’t get it work as well as we wanted to.

Some technical systems become decentralized. We could agree that search wouldn’t be great if it were split on 10 different sites. It’s cool to see what all these people are doing. People are building all of these apps that use the social graph like games. People are building alternative structures. It’s all cool.

Q: There is a Facebook fan page with 5,000 fans for a movie called “The Social Network.” We all know this is a telling or an imagined history of Facebook. Do you have any anxiety about it coming out? Is it annoying?

Zuckerberg: I wish that when people try to do journalism about Facebook, they try to get it right. [To Kirkpatrick] I appreciated all the time that you took in talking to people in the ecosystem — at the same time, there was another guy — a fiction writer — who wrote a book about Facebook. When producers had a choice about what to base a movie on, they chose the fiction book.

Q: But he tried to interview you for his book too?

Zuckerberg: The reason that we decided not to participate was that it was very clear that it was going to be fiction from the beginning. We don’t want to participate in something like that and have someone come along and say, ‘Well, he talked to Mark Zuckerberg.’

Q: Are you jealous that Justin Timberlake isn’t playing you?

Zuckerberg: Well, his cousin works at Facebook and is the lead designer on news feed. He’s a great guy. The movie’s fiction. All we can do is focus on building the best thing and not remember what people said about us along the way. It’s important even not to listen to all the good things people say you too.

Q: Do you wish you could get away from the celebrity and notoriety that stems from what you’ve created?

Zuckerberg: Well, I can. It’s called hanging out with my friends. A lot of my friends — my closest friends — are the people who’ve been along for the whole experience. As an example of fiction, they wrote the movie and said that I was creating Facebook to get girls. But I’ve been dating the same girl since even before Facebook.

Kirkpatrick: The issue about how movies change the image of Facebook is a far smaller issue, in my opinion, than dealing with governments and regulators. Whether you like it or not, I don’t think the movie really matters. I do think that when you are maintaining millions of peoples’ data and governments feel threatened, that’s a real issue. The movie is a distraction. How are you going to handle this issue? The EU is coming after you. The Australian government is coming after you.

Zuckerberg: We have guidelines. There are lots of people we work with and listen to. What I find more often than not is that all of these people are reasonable. The key thing is to engage with all of these people and have real discourse.

Kirkpatrick: Are you personally willing to engage to that degree — I think it’s important for the CEO of Facebook to spend a lot of time doing that. [Google co-founders] Larry and Sergey hired Eric Schmidt. Are you going to hire an Eric Schmidt? You’re a product guy. Are you going to want to be dealing with government officials — I heard you did well with David Cameron — but there are a lot of misconceptions abroad in dozens of other countries about Facebook.

Zuckerberg: We have a smart team of policy thinkers. These are important issues. We want to engage with people in this debate. There are great people on our team. In terms of these companies, I don’t know if the model of hiring an external CEO is really a viable model. Technology companies really are product companies. A lot of the most important decisions come down to what you’re offering to the people you serve. We need to make sure we handle a lot of these things together. I think for the long term, I don’t think we’re anywhere near the end. The platform decisions, product decisions we make over the next five to 10 years are going to be the most important ones we make.

Q: What should Facebook users expect to see — will we be able to make phone calls or get CNN video 24-7 on Facebook?

Zuckerberg: The goal isn’t really to do that on Facebook.com. Virtually every service on the web and in real life will be redesigned from the bottom up with people at the center. That might happen with incumbent companies, or it might happen with new companies. We have a lot of work that we need to do to ensure that we build out that kind of plumbing. Maybe the CNN and the New York Times of the future looks really social and you can get pictures from friends. We’ve already seen services like Pandora, where you can go to the site and automatically listen to music that you already like.

Q: But there are going to be many consequences to these changes.

Zuckerberg: And they’re going to be good.

Kirkpatrick: Facebook’s strategy is not to be a website long term. The platform is Facebook’s future. Facebook is aiming to be a set of services that are applicable to people no matter what you do. It’s going to be on the web. On your phone. You’re going to apply it to everything that you do.

Zuckerberg: If we don’t succeed at it, someone else will. That’s the way things will go. Every single app that has been built with this methodology is more engaging and grows faster than those that haven’t.

Whenever there are good entrepreneurs or folks who are attacking games — when people hit that, it’s going to work. We can be the platform that provides that, we are certainly in the lead now. We’re not near the end. So there’s a lot of room for innovation, and we need to keep moving in that direction if we want to engage that.

Q: As CEO, when was the last time that you wrote code?

Zuckerberg: For Facebook or not?

I use Facebook.com all the time. I use the Android version, the iPhone — if you want to be a platform, you have to write code. So sometimes I write code on the weekend. The most recent time I checked in code for the platform was for f8. The platform team had this big monitor on the wall with the number of bugs that they needed to fix, and there were 150. I’d finished my keynote and so I helped out. So much of the infrastructure of what we do requires good code and abstractions.

Q: What are the issues or things that keep you up at night?

Zuckerberg: The main thing is that there is so much more to do. We have 1,500 people. We’re a small company.

Q: Worth $27 billion.

Zuckerberg: Who cares? There are 400 engineers and a lot of excited interns. But that’s it. There is no other organization on the earth that is serving 500 million with 400 people writing code for it. We are not near the end. We are not in maintenance mode. There is a lot more innovation to do.

I think there are companies that act like they are in a zero-sum market, that when others win, it’s their loss. But we don’t act like that. A couple of years ago there were many fewer people using Facebook. Now there are more. This behavior [of sharing] in the world is growing. We want to do our best in getting there.

Q: You’re still young. You’re 26. You’re working with people much older than you. Why did you become a successful entrepreneur? Are you still learning to be a CEO?

Zuckerberg: I spend a lot of time thinking about it. What I think it comes down to are two key things for building something well — one is having a really strong sense of what you want to do. Along the way are many distractions, you can get sidetracked. I was watching a video of [Steve Jobs], and his advice was to make sure you really love what you do.

Number two is building a good team. I had to find a good head of engineering who could scale out and have a good perspective on talented hackers. I had to find a good head of product that can make sure that everyone knows what the roadmap is — Sheryl [Sandberg]. Any one of these people could run the company. If I disappeared, they could run it.

Kirkpatrick: It’s really interesting that he’s been able to hire great people from Sean Parker to Sheryl, who really share the vision. The scope of Zuckerberg’s vision is very, very big. He’s found all kinds of good people who can manage different parts of the task.

Q: Do you still sort of study how to be a CEO? Do you think about what you need to do and what you need to learn?

Zuckerberg: Yea. I started this when I was 19. I knew nothing. When I moved out here, I was so lucky in happening to meet the right people who could help us build the company. Meeting the right venture capitalists. Doing a contract to set up a data center. I took computer science classes. None of them were about setting up a data center.

If the next five years are as exciting as the last five years, there are going to be a lot of hard decisions to make. We have to spend a lot of time thinking about how to get them right.

Q: Are there any questions that you wish people would ask you?

Zuckerberg: There’s an odd dynamic in these interviews where the thing I’m most excited about is what we’re building now. And I can’t talk about that.

Um, I don’t know. Maybe I can’t answer that because I’m too busy thinking about the questions that I don’t want to answer.

It’s important that as the company scales, that all the people who use our service — and we have the most amazing statistics — half of our users log in every day. We thought it would go down as we grew, but it hasn’t. It’s even increased.

Q: [A question about international growth]

Zuckerberg: The way the site grows is that people tell their friends. The whole marketing of the service is word of mouth. Until recently, we never targeted specific countries. We started off in colleges and we basically took requests. We put ads up to pay for servers. Then we opened up on campuses based on requests. When we opened internationally, we built a translation tool for users to translate all strings of text. Within two weeks, users voted on translations for Spanish. The French did it in one day. I guess they’re really passionate about their language.

Only recently, we started targeting markets because we ran out of countries. There are only a couple of large countries that we aren’t the leader in. They are Japan, Russia, South Korea and China. We had three engineers come into Japan and just go for it.

In Japan, we’re already at more than 1 million people, and they’ve only been there for six to nine months. We’ve seen countries get up to 80 percent of their Internet population on Facebook. It really is an international service. People ask us all of these questions about how people use it differently in different countries. The crazy thing isn’t how differently people use the service. It’s how similar their usage is.

This is one of challenges that will be really fun. We get to build products where people have yet to touch a social network or where the majority of people are on another service.

Q: Last year, the State Department asked Twitter to delay a servicing during Iranian elections protests. Would you honor such a request?

Zuckerberg: It would depend. Some of the most interesting use cases we’ve seen have been of people using Facebook for political purpose. You [Kirkpatrick] wrote about one in your book, about FARC.

Kirkpatrick: One of the most interesting things about Facebook is that it’s in so many countries that aren’t democratic. There’s this very healthy tension that Facebook is playing a part in. Facebook is a platform for the empowerment of its members. One of the things that people don’t pick up on is that Twitter’s a broadcasting tool. You get on Facebook because you want to stay in touch with your friends. But ordinary people sign up for Facebook and suddenly they have a broadcasting tool.

Q: Are you ever worried that you’ll be targeted?

Zuckerberg: I think someone is trying to sentence me to death in Pakistan right now. That’s not a joke. We think what we’re doing is really valuable for the world. I hope I don’t get killed.

Q: There are rules on pornography and censorship. How do you decide — how do you decide what crosses the line and what doesn’t?

Zuckerberg: We serve an international user base. We have a goal to really be an international company. Different countries have different standards for hate speech. In Germany, it’s illegal to post anything with Nazi content. That’s a decision they made after World War II. So our stance is that we respect it if it’s a law. Now if Germany came to us and said “Don’t allow Nazi content around the world,” that’s ridiculous.

People have written about — why does Facebook allow Holocaust denial pages? (Even though it’s run by a Jew.) When a country has a clear standard and it’s written into law, we’ll respect that.

In general, we believe that free speech, openness and transparency are good. But we also believe that we should respect other cultures.

Q: On paper, we all know that you’re a billionaire. You’re a very wealthy guy. Where do you see yourself in 20 years? With your name on buildings? With philanthropy? Running another company?

Zuckerberg: I don’t know if you’ve heard of Kevin Rose. But he has an awesome quote — he was on the cover of BusinessWeek with the headline “How this kid made $60 million in 18 months.” He does this podcast every week with this guy on a couch. Someone asked him about it, and he said “I’m not a millionaire. I’m not even a thousandaire. I had to borrow money for this couch.”

I just want to live within walking distance from our office. We moved offices to a bigger building recently. We moved to this new place. I just wanted a new apartment that was within walking distance. So my assistant was looking for an apartment for weeks and weeks. Finally, I was traveling and she called me and said, “I found a small house. I’m renting it.” I hadn’t even seen it. I didn’t care. I just want to go home and sleep and come back to the office.

Q: And 20 years from now? Gates? Philanthropy?

Zuckerberg: We’ll see. This trend of people becoming more open and transparent is really important.

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