Emily Chang and Sarah Frier
FACEBOOK chief executive Mark Zuckerberg has a big, expensive goal: to connect the world to the internet. He spoke with Bloomberg’s Emily Chang about his plans, after returning from a trip through south-east Asia and India last year as part of his Internet.org initiative. The interview aired yesterday on Bloomberg Television’s Studio 1.0. The transcript below has been edited and shortened.
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… 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 in developing countries, more than 20 percent of gross domestic product 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… 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 we can.
What has been your single greatest achievement, and what has been your biggest setback?
Zuckerberg: 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 cellphone 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… 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 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…
But it turns out that the biggest hurdle… is 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… 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… by giving people some free basic services by working with operators and governments and helping them understand what they can use the internet for.
Facebook is a for-profit company. Why call it Internet.org? Is this a non-profit? Is this a charity?
Zuckerberg: 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 fulfiling 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.
Do you have a better idea of when this will become profitable?
Zuckerberg: No, I don’t have a better idea. The reality is just that a lot of people can’t afford to pay for data access in some of these areas; then there 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. 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.
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?
Zuckerberg: 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 US. So even if you haven’t paid for a phone plan, you can always dial 911, and… 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…
We’ve spoken to ad executives who are excited to advertise on Internet.org. How does that benefit users?
Zuckerberg: 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 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… 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.
Does that mean no advertising?
Zuckerberg: 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 US 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; a poultry farmer using Facebook and setting up a page in order to sell… more chickens; a university student using the internet, using Wikipedia, to look up information and save money on books. It’s pretty crazy.
What kind of data are you collecting about these users, and how do you use that data?
Zuckerberg: 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…
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?
Zuckerberg: 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 non-profits and governments.
Have you had talks with Google about partnering with them? Would you ever partner with Google?
Zuckerberg: 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… 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 criticised Google’s Project Loon. How do you respond?
Zuckerberg: 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… 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 number one 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 co-ordinate the response, so people know and can count the people who have come into contact with the people who have Ebola.”
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?
Zuckerberg: That’s not something that we are focused on right now with Internet.org. There are countries where they reach out to us... For example, Malaysia… 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 prioritise countries that are reaching out to us actively for this.
How will you judge whether this has been a success?
Zuckerberg: 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… Once we’ve made it so this system is working in every country… step two will be making it so that people will use it…
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…
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… and a billion or more people can get connected, then that is going to be a huge win. – Bloomberg