Overview: Facing a challenge

Facebook, the world’s biggest social networking website, has appointed a new CFO in David Ebersman. But Facebook’s newest recruit has to make the transition from pharmaceuticals to the business models behind web 2.0. Is it too much to ask?

What’s happened?

Facebook has ended a three month search for a new CFO after Gideon Yu, the current man in charge of the numbers, announced he was stepping down.

Yu had a serious internet pedigree having held senior finance roles for Google, Yahoo and YouTube. Ebersman on the other hand joins from Genentech, a $13bn (£8bn) turnover pharmaceuticals company that makes a fortune from a highly successful breast cancer drug.

Ebersman has been there since 1994 and also served as vice president of product operations before taking on the CFO mantle. He is not a qualified accountant, though was well versed in economics while at the Ivy League university Brown.

Entering the race for the Facebook job would have been illuminating because there is precious financial information on the networking site in the public domain. That means they must have shown Ebersman the books before he took the plunge.

Whatever he saw must have either impressed him or seemed like a gripping challenge because he leaves a company that seems well insulated from the global downturn after booking 14% growth year-on-year.

Reports in the press say Facebook will produce positive cashflow in 2010 and that sales run at around $500m.

However, Facebook has recently sought investors, with the Russian Digital Sky Technologies snapping up a 2% stake for $200m. That values the website at around $10bn. It begs the question: why do they need the help?

What happens next?

Put aside all the numbers. Ebersman has to make the transition from pharmaceuticals to consumer technology. Can it be done? Experts think so, though his appointment did come as a surprise. One senior headhunter says: ‘Pharma FD is pretty different, so lots to learn there.’

What Facebook is believed to have seen is Ebersman’s ability to manage the finances around big research and development projects, something Facebook will be deeply involved in as it pushes to improve its revenues. As one observer put it: ‘R&D experience is useful when you have to reinvent technology every five minutes.’

But another expert makes this point. ‘The real challenge in crossing sectors is preparing yourself for the nuances that may not be apparent when you look at the business model.’ Given the dearth of information publicly available, Ebersman would have had to rely heavily on Facebook being open about its finances and business model.

Once he starts, however, the detail is bound to be opened up. It might reveal very much more than he learned in advance.