The "maximize shareholder value" chant is a piece of MBA dogma that, although accepted by many as an immutable law of the universe, is a relatively recent American invention. It's not a law, managers don't go to jail if they don't do it, other countries do it differently, and we used to do it differently as well.

Many make good arguments that it doesn't even work very well. American car companies are a good example. Thomas Murphy, a president of General Motors said, "GM is not in the business of making cars; GM is in the business of making money." Carmakers like Toyota, on the other hand, focused on making cars very well (and making customers happy), and kicked Detroit's ass. (The book Toyota Kata and the TAL episode NUMMI give good intros to why, and why it was the philosophy of American carmakers that prevented them from adapting.)

The problem with focusing on maximizing return on capital is that there are a zillion ways to make those numbers look great in the short term while screwing the company in the long. But hey, by then, everybody has cashed out. Except the suckers, and who cares about them? As an example, see what the MBA dogma did to Simmons Mattress: http://www.nytimes.com/2009/10/05/business/economy/05simmons...

They have many people who have invested their lives creating this company. They want their payout. If they have to create a bubble to get it, that's what they are going to do. They'll get their cash, you can bet on that.

I didn't say "maximize shareholder value". I said FB has to make decisions that benefit their stockholders; that's not quite the same thing.

Also, as I pointed out in another subthread, there's a big difference between a company that gets revenue from users directly (like Amazon, the example brought up in that subthread--or like a car company) and a company whose users only generate revenue indirectly, as FB's users do (through ads). The latter kind of company has a much weaker link between benefiting users and benefiting shareholders than the former does. I've outlined in other posts in this thread the strategy I think FB is following, and it's not a strategy that's focused on maximizing their short-term return on capital, but it still makes them act in ways that make at least some subset of their current users dissatisfied.