Facebook’s COO Sheryl Sandberg has just received a last minute holiday gift. However, this is one present that she won’t be unwrapping. Walt Disney Co. announced on Wednesday that they’ve nominated Facebook’s Sheryl Sandberg to its board. The act is widely hailed as a move by the 86 year old media company to tap into the younger demographic that spends a large amount of time with online social networks.
Over the past 16 months, Facebook’s user population has tripled and grown to more than 350 million users. Adding Sandberg to the Disney board as a director would give Uncle Walt direct access to a highly coveted access. Not to mention, this appointment would facilitate an unprecedented level of cross platform promotion and integration between the worlds largest social network and one of the worlds largest entertainment giants.
“It shows that Disney is committed to taking social networking seriously, integrating social networking into its traditional entertainment content,” said Needham & Co analyst Laura Martin.
Martin also added that this appointment would be a cost-effective way for Disney to acquire web expertise without having to acquire a company. In contrast, News Corp. paid $580 million for social networking platform MySpace in 2005, only to be eclipsed by Facebook.
Disney spokesman Jonathan Friedland comments, “She knows a lot about a lot of the areas of new media and technology growth that we are interested in, so it makes a lot of sense for us to have her.”
While Disney is steeped in big media companies, owning the Walt Disney Pictures film studio, ABC Television networks, ESPN, and a portion of Hulu, Oppenheimer & Co. analyst Jason Helfstein says that Disney’s internet operations are currently immaterial to its earnings.
“None of the big media companies make much money on the Internet,” said Helfstein. However, with the appointment of Sandberg, this might be the beginning of a major shift.
Again, this is only an appointment to the board, but does open up a highly mutually beneficial relationship for both companies. Disney stands to gain access and industry know-how in a highly competitive market, while Facebook could capitalize on Disney’s 86 year media market experience. Disney shareholders are expected to vote on Sandberg’s nomination, along with the company’s 12 other directors (including Apple CEO Steve Jobs and Sybase Inc. CEO John Chen) at a shareholder meeting in March.
Tags: Disney, Facebook, myspace, Sheryl Sandberg, social networking, walt disney pictures
