Facebook's Executive Upheaval Comes with a Silver Lining
It's naturally unsettling that several Facebook ( FB) execs who had collectively played key roles in shaping its biggest platforms have jumped ship over the last 12 months. And it's hard to ignore the fact that the most recent departures include an exec who some inside Facebook viewed as the company's second-most-powerful person, and who was just ten months removed from getting a pretty big promotion.But there's one silver lining here: As the departures have mounted, Mark Zuckerberg has looked more and more willing to take a hands-on role in shaping the major changes he wants for the company's most popular apps and services. Indeed, Zuck's wish to directly put his imprint on those apps and services, and to better integrate them with each other, appears to have much to do with some of the departures.
Last May, as part of a broader restructuring, Facebook put Chris Cox, who had been in charge of the core Facebook app, in charge of overseeing Facebook's broader "Family of Apps," which also includes Instagram, Messenger and WhatsApp. On Thursday, Zuckerberg disclosed that Cox has decided to leave, and that the same holds for Chris Daniels, who was put in charge of WhatsApp at the time of the restructuring.
Jan Koum, the co-founder and CEO of WhatsApp, announced he was leaving (amid objections to changes that Facebook planned for WhatsApp) not long before the restructuring. And four months after the restructuring, Instagram co-founders Kevin Systrom and Mike Krieger decided to leave Facebook. Systrom and Krieger reportedly had differences over Instagram's product direction with Zuckerberg, Cox and new Instagram product VP Adam Mosseri.
It doesn't seem to be a coincidence that news of Cox's departure comes less than two weeks after Zuckerberg outlined plans to integrate Facebook's messaging services and support end-to-end encryption on all of them, as part of an effort to more strongly emphasize private interactions. "This will be a big project and we will need leaders who are excited to see the new direction through," Cox said while announcing his departure, suggesting that he doesn't have this excitement. Likewise, The New York Times and BuzzFeed both report that Cox was displeased with Facebook's new product direction.
But while Cox wasn't thrilled about the prospect of spearheading Facebook's planned product overhaul, Zuckerberg apparently is: Instead of naming a replacement for Cox, Zuck plans to have the heads of Facebook's four main platforms report to him directly going forward.
And in what's arguably another sign of how Facebook is prioritizing the development of its messaging platforms, Zuckerberg has decided to make Will Cathcart, who had been put in charge of the core Facebook app last May, in charge of WhatsApp.
Though losing so many accomplished and well-respected product execs is bound to cause some turbulence for Facebook in the coming months, having the co-founder and CEO who played a massive role in shaping Facebook's apps and services during its meteoric rise take on a bigger product role probably isn't a bad thing.
Tesla's Model Y Launch Is Following a Familiar Script
Mar 15, 2019 | 12:57 PM EDTIn terms of specs, Tesla's (TSLA) Model Y crossover lives up to the hype. Though the car can seat seven and has 66 cubic feet of storage space, its design and 0-60 times have more in common with a sports sedan than your typical SUV. And Tesla insists the Model Y will handle like a sports car as well (some initial test riders seem to concur).
And in line with expectations, Model Y trims carry prices that are only $2,000 to $4,000 above those of comparable Model 3 trims.
But the fact that Tesla, whose shares are down nearly 4% in Friday trading, says it will be about two years before deliveries start for the cheapest version of the Model Y doesn't seem to be going over well with Wall Street -- particularly since Elon Musk's company has quite the history of missing production and delivery targets.
Whereas Tesla expects the $47,000 Long Range version of the Model Y, the $51,000 Dual Motor AWD version and the $60,000 Performance version to see deliveries start in the fall of 2020, the $39,000 Standard Range version of the car is only expected to see deliveries start in the spring of 2021.
Moreover, Tesla hasn't yet shared details about how fast Model Y production will ramp, even if it hits its aforementioned delivery targets. On the Q4 earnings call, Musk only said that Tesla is aiming to "achieve volume production" for the Model Y by the end of 2020. Six months before that, he suggested the Model Y will enter production during the first half of 2020.
In addition, the delivery timetable has sparked concerns that Tesla's near-term sales will be hurt as potential Model 3 buyers choose to wait for the Model Y to become available. And the fact that Tesla is asking for a $2,500 deposit for Model Y reservations -- $1,500 more than what it asked for Model 3 reservations -- has heightened worries about its cash position as the company pushes ahead with both the construction of its Shanghai Gigafactory and a sales strategy overhaul involving price cuts and a shift to an online-only sales model.
As with so many other Tesla events and actions, there's a glass-half-full and a glass-half-empty way of looking at the Model Y launch. The car appears to be an impressive piece of engineering, one that potentially lets SUV buyers avoid the usual performance and handling tradeoffs that come with extra seating and cargo space. And it also has a worrisome delivery schedule that Tesla may or may not hit.
If Tesla was sporting a lower valuation, it would be easier to focus on the positives here. But with Tesla's enterprise value (market cap plus net debt) still close to $60 billion, it's understandable that markets are a little concerned about the negatives.
To see Tech Check coverage from the previous trading day, click here.
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