Facebook adds Netflix CEO Reed Hastings to its board
Signaling that it’s seriously preparing for what some anticipate will be a $100-billion initial public offering next year, Facebook Inc. said it has added Reed Hastings, Netflix Inc.'s chairman and chief executive officer, to its board of directors.
Hastings, who co-founded Netflix in 1997 and guided the online DVD rental service through an IPO in 2002, could help Facebook navigate its own public offering. He is also expected to bring significant expertise to distribution of digital entertainment as the Palo Alto social networking company explores providing more offerings to its users.
Facebook is reportedly planning to launch a music-streaming service this summer and has been exploring what role it can play in delivering movies and other media to users. In March, Warner Bros. launched an application allowing users to rent and watch movies directly on Facebook, starting with “The Dark Knight.”
“Reed is an entrepreneur and technologist who has led Netflix to transform the way people watch movies and TV,” Facebook founder and CEO Mark Zuckerberg said in a statement. “He has built a culture of continuous rapid innovation, something we share and work hard to build every day.”
Hastings also sits on the board of Microsoft Corp., which made a significant investment in Facebook. He is Facebook’s sixth director. Other board members include venture capitalists Marc Andreessen, Jim Breyer and Peter Thiel and Washington Post Co. Chairman and CEO Donald E. Graham.
Facebook is bringing depth to its board as it prepares for an IPO or to begin disclosing financial data by April. The Securities and Exchange Commission requires companies with 500 or more investors to disclose financial information. Facebook has said it will cross that threshold next year. It’s valued at $71.3 billion on SharesPost, a secondary trading exchange for shares of closely held companies.
The Facebook board slot is a coup for Netflix, which has been slow to embrace the social evolution of the Web. The Los Gatos, Calif., company is working to make its service more social for its more than 23 million subscribers in the U.S. and Canada.
Netflix stock rose as investors speculated that Hastings’ involvement with Facebook, which has more than 600 million users around the globe, could lead to a tighter partnership between the two companies and potentially boost the number of Netflix subscribers and improve its movie recommendations.
Netflix shares climbed $7.06, or nearly 3%, to $255.72 on the Nasdaq Stock Market. The stock has risen more than 40% this year.
“Facebook is propelling a fundamental change in how people connect with each other and share all kinds of content,” Hastings said in a statement. “I’m looking forward to working with Mark and the rest of the board to help Facebook take advantage of all the opportunities ahead.”
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