Valleywag's coverage last week of Sandberg's spinning in response to the departure of a key employee was deemed, in some quarters, a "character attack." Yet Sandberg's character is the very issue here. Her response is very telling: First, she wrangled a long followup story from her frequent dinner guest Kara Swisher that called our story sexist, over-the-top — and factually correct.

Swisher's report is damning for Sandberg. It acknowledges that Facebook executive Matt Cohler, who left to join Benchmark Capital, was unhappy with Sandberg's leadership. It reports that Jonathan Heiliger, the company's infrastructure chief, has also been unhappy with Sandberg — Swisher errs only in saying that the two have patched things up. Swisher's new report also means that the version of Ben Ling's departure fed to her by the company last week was false.

Facebook executives have acknowledged all these facts. But characteristically, Sandberg has steered the discussion away from the real problem — the bad decisions she's made, the poor judgment she's demonstrated — and toward massaging reality. She is, even now, planning a new PR campaign to buff her image.

Did it ever occur to Sandberg to figure out why she rubs so many of Facebook's technical leaders the wrong way? Could it have anything to do with her meddling in matters that CEO Mark Zuckerberg has said aren't her job? Facebook has real problems in Sandberg's area of responsibility. Billing, customer service, and other mundane-but-critical aspects of the social network's advertising operations are chaotic, and require fixing. Sandberg's moves to shore up her image suggest the real reason for her unpopularity within Facebook: Her overwhelming concern for style over substance. How ironic that that pointing that out has sent Sandberg spinning.

Here's something odd: Zuckerberg has had a Twitter account since at least May — mentioned in Rose's Twitter account of his teatime with Zuckerberg — but it seems mostly inactive. Is he just trying to fit in with the San Francisco crowd, or is there something more going on here? I'm reminded, for some reason, of the time Facebook PR director Brandee Barker friended her counterpart at Microsoft right before the two companies announced a big advertising-and-investment deal.

Zuckerberg tends to fall in love with his latest hire, and give that person more and more responsibility, until there's some obvious failure. Even from the outside, it's crystal clear that's what happened with Oven Van Natta, Sandberg's predecessor as COO; it happened, too, with Chamath Palihapitiya, whose portfolio waxed and waned with Zuckerberg's favor.

So Sandberg's rampage through Facebook's technical ranks is just par for the course. If past experience is any indication, Zuckerberg's hanging back, keeping his fingerprints off her actions, and waiting for her to trip up. Her botched handling of ace product marketer Ben Ling's departure may be what turns Zuckerberg against Sandberg — or not. What's clear: When his disfavor arrives, it will be sharp, cold, and unmovable. Sandberg won't know what hit her. And Zuckerberg will be all smiles — like he was today in San Francisco.

Do the math: Ling joined Facebook in October 2007. He's leaving Facebook in a few weeks, months before his one-year anniversary — and it normally takes one year of employment for stock options or restricted stock to vest. However miserable Ling was under Elliot Schrage — Sandberg's personal flack and de facto chief of staff, whom she put in charge of Facebook's development platform, to the utter shock of the entire Valley — can you imagine he walked away from that much money? Far more likely: Sandberg and Schrage asked him to resign in exchange for getting to keep his shares. Ling, who was well-regarded at both Google and Facebook, now gets to walk away from Sandberg's mess.

Cohler, formerly Facebook's product chief, has also made nice noises about Sandberg — and he, too, needed the cash. He's now a general partner at Benchmark Capital, where Sandberg's husband, Dave Goldberg, is employed as an entrepreneur-in-residence. (None of this is coincidence.) General partners at VC firms normally buy into the funds they invest; Benchmark Capital's most recent fund, raised in February, is an eye-popping $500 million.The amount Cohler would have to invest personally comes to roughly $500,000, by my estimates. Selling his Facebook shares seems like the most likely way he'll come up with that money. Isn't it likely that in exchange for making nice noises about Sandberg on the way out, Cohler got an assurance that Facebook won't make trouble about his share sales?

The fundamental problem with Sandberg's take-no-prisoners management style: It's exquisitely tuned for the zero-sum world of Washington, where you're either in power or out. She's treating her appointment as Facebook's COO like a new administration coming into the White House. Her years at Google, which was the only tech-startup game in town for the long years of the bust, reinforced the wrong lesson. Washington's bitter internal rivalries thrive on a scarcity of opportunity. Today's Valley has an abundance. Her employees have options, and not just the kind she can grant.

Which leaves the question: Why is Sandberg so determined to drive talent out of Facebook? My working theory: She wants to remake the company in her image. Here comes the Sandberg Administration! But to do so, she'll need to find skilled accomplices, not servile yes-men like Schrage (who wouldn't know an API if it extended his subclasses). And she'll need to articulate what, exactly, her new vision is.

For all of Mark Zuckerberg's flaws, he's created a website which will soon have 100 million users, and is worth billions of dollars according to a long line of Silicon Valley moneymen who are slavering to buy his employees' shares. What, exactly, has Sheryl Sandberg done, besides buy a lottery ticket by joining Google when it was still private?

Sometimes you have to tear down before you build. But no one knows what, if anything, Sandberg is building — besides fear and doubt. That's hardly the mark of a Silicon Valley leader. It's a tactic that may have worked in Washington, D.C., where Sandberg worked for the viciously political Clinton administration. But she's killing the company's morale with her Beltway tactics. If she has a bright idea, she'd better start talking about it. It will take far more than three days to rebuild this temple — and it's not clear she has time to spare.

The pair alleged that Harvard classmate Mark Zuckerberg stole their idea in creating Facebook, ended up settling, and then appealed over the terms of the settlement; a judge denied their request. But if their long-fought legal battle with Facebook proved anything, it's that the JFK Jr.-lite Winklevoss brothers never quit, even when everyone — including judges — thinks they should. Take that, Serbia! (Photo by Getty Images)

Penn repeated the same advice to Clinton, telling her not to worry about being perceived as "warm" or "nice." Gates's image didn't shift until he actually changed from being a hard-driving capitalist to saving the world.

We think Penn's next client should be Facebook CEO Mark Zuckerberg. (Hiring the likes of Penn is perhaps the only job Facebook's new flack, the D.C.-connected but tech-clueless Elliot Schrage is qualified for — so get cracking, Elliot!) After Zuckerberg's disastrous interview with Sarah Lacy at the South by Southwest conference in Austin, Texas this March, I was told Lacy's manner — which struck some audience members as overly familiar — was an attempt to make Zuckerberg, who's robotically stiff on stage, seem more human. In person, Zuckerberg's quite engaging; he needs stage training, not an extra dose of "humanity." Penn seems brash enough to tell him as much. Mark, meet Mark — I think you two need each other right now.

The news is hardly bad news for the Winklevoss brothers and ConnectU's third cofounder, Divya Narendra. Court papers say the three will get "millions" of dollars in cash as well as stock in a startup too popular with mainstream America's millennial generation to fail. (The Winklevosses were fighting the settlement after they discovered that the Facebook common stock they would receive was worth less than they supposed.) Plus, there's still that shot at gold.

This much is true: Zuckerberg came close to selling his shares. But at the last minute, he backed out, and instead accepted a cash bonus of $900,000 from the company. Technically true that that wasn't a stock sale; but it did amount to a liquidity event for Zuckerberg — one that didn't quite make him a millionaire.

Hence the seemingly arbitrary limit on employee's stock sales. In November, employees will be allowed to sell either 20 percent of their shares, or $900,000 worth of stock — whichever is less. (The $900,000 limit, seemingly arbitrary, was based directly on the size of Zuckerberg's cash bonus.) Those shares must be sold at the common-stock valuation of $4 billion, not the $15 billion valuation Microsoft paid for in preferred shares. (Preferred stock, because it allows owners to be paid first in the case of a sale, among other rights, is more valuable than common stock, which carries no such privileges.)

Those are the rules, at any rate. Facebook will have a tough time enforcing them. There's nothing under the law preventing employees from selling more than $900,000 or more than 20 percent of their holdings, and there are plenty of willing buyers, some of whom may be glad to buy the shares at a valuation higher than the sanctioned $4 billion. (Facebook hopes to prevent sales at a higher valuation to avoid a revaluation of the company that could make it harder to recruit new employees.) What's likely to happen is that employees who break Facebook's rules will see promotions disappear and future stock grants dwindle — which will matter little to the company's earliest employees.

How much money is at stake? A startup typically allocates 20 percent of its shares to employee options. Even at the lower $4 billion common-stock valuation, that's $800 million waiting to bust loose from Facebook's coffers. Will Facebook's earliest employees be satisfied with a six-digit payout, knowing that some wealthy investor would be glad to make them multimillionaires?

(Photo by AP/Ruttle)

Hruska noted that O'Connor's other blog, Ivygate, had called the twins "spoiled bitches that tried to lay one on the invincible Mark Zuckerberg and failed." We don't see the problem with hiring "spoiled bitches" to work at NonSociety — they'll fit right in with Allison! Had Hruska really been cutting, she'd have asked how Julia Allison's latest BFF, Randi Zuckerberg — older sister of the man the Winklevosses accused of stealing ConnectU's code for Facebook — would feel about the hire.

One would think they would have gotten a proper valuation on the shares before agreeing to take them as payment. That in itself suggests that the twins, who majored in economics at Harvard, weren't paying attention in class.

And if they have some other evidence of brains, it wasn't on display for the Globe. Their coash, Ted Nash, tries to argue that they're just strong, silent types: "Inside, everything's working all the time with them. What you see isn't what you get."

What you see, according to the Globe:

They are impossibly constructed: 6 feet 5 inches tall, with shoulders that jut out like coat hangers, their limbs wrapped in the long, strong muscles typical of rowers, their heads crowned with identical waves of light brown hair.

A photo accompanying the piece shows the two with California governor and former bodybuilder Arnold Schwarzenegger; all three have equally rippling pecs, sculling forward from their white polo shirts.

What you get, from Cameron:

One of the cool things about amateur athletics is that I think the pursuit is sort of the pursuit of excellence for nothing more than trying to be excellent. At the end of the day, going fast in the water, in its own intrinsic value, doesn't mean much more than the time that you put on the clock. But I think it's the focus and the effort and what you put in to become excellent, and the fact that it is, in some respects, meaningless, that makes it all the more interesting. We're getting a lot out of it, but it's not like an NBA championship, or something like that. We're trying to be good at something for the sake of being good.

Sartre would be proud. Tyler's contribution:

"I think people get caught up in what's the value of rowing — what does it do for you? — and that's just totally missing the larger picture.... The way it shook out, we ended up in the pair. We thought it was a good fit for us... If you miss a practice, you pay. It's a direct correlation. You see it. It's impossible to not be hit over the head with that reality.... Everybody counts on every stroke.

At that last bit, Cameron nodded eloquently. And a stereotype held firm.

(Photo by Reuters)

Allison's sort-of ex, Digg cofounder Kevin Rose, said he was buying Google. Surely not for Knol, Google's weak attempt at taking on Wikipedia — at launch, its search engine didn't even work. Jackson, come back and help us make sense of this crazy business! (Photo by Jason Calacanis)

Segar, who was also diagnosed with Asperger's before a death from unrelated causes in 1997, wrote that "like it or not, as an autistic person or someone with Asperger syndrome some jobs will be more suitable than others."

Segar lists computer programmer and architect as suitable careers. Mostly, Zuckerberg's job is a combination of those two. The tough part is that as a company founder and CEO, Zuckerberg has to be Facebook's chief spokesperson, which is really a sales job — and one Segar lists as especially difficult for those with Asperger's. It requires one to be an excellent conversationalist, a particular challenge to those diagnosed with the syndrome.

He also offers tips for the afflicted on how to talk. Here's his most relevant advice on how Zuckerberg could avoid stalling when faced with the likes of Stahl:

• Be careful of stating the obvious.
• Listening can be extremely difficult, especially if you have to keep your ears open 24 hours a day, but you can get better with practice. The most important thing to listen to is the plot of the conversation.
• Be on the lookout for eye contact from other people as it can often mean they would like to hear your point of view.
• Body language doesn't just include gestures, it also includes facial expressions, eye contact and tone of voice.
• You might be one of these people who almost talks in a single tone without knowing it.Ask a trustworthy person if this is true and if it is you may have to exaggerate the intonation in your voice to emphasise what you say, but not too much. This will sound artificial at first.
• If you are a young man whose voice is breaking, then if you find it more comfortable just let it break for good. It may sound strange at first on the inside but it will be sounding much more natural on the outside. If you are worried about what your friends might think which should only be a short term problem anyway, it may be useful to take the opportunity of letting your voice break while you are changing schools.
• [For interviews] prepare as many possible answers for as many possible questions as you can but don't over rehearse or rigidify your answers. It is good to get help at this stage.
• Aim to be the assertive type, one who has an upright but relaxed stance, maintains eye contact when listening or speaking (for over two thirds of the time) looking at faces as a whole, can express his true feelings, and is interested in other people's opinions as well as his own.
• If you don't react to other people's body language with your own, they might mistake you for being unsympathetic.
• If you try to come across as being cooler, wittier, tougher and more confident that other people, then whenever you break an unwritten rule people might mistake it for nastiness. In this case, it might be in your best interest to drop your pretence.

Facebook's slapdash decisionmaking about ad placement on the site, a direct result of CEO Mark Zuckerberg's endless dithering on the subject in the process of redesigning, led to the Microsoft search deal. In the end, Facebook decided to kick Microsoft's tacky banners off its homepage and users' profile pages, in favor of its own targeted Social Ads. That was a violation of Facebook's advertising agreement with Microsoft, of course, requiring a renegotiation of the deal.

Microsoft, of course, was ready with its quid pro quo: Search advertising, a market Facebook has yet to tap, but was likely to eager to try to explore itself. Instead, it's running Microsoft search results, and Microsoft search ads, both of which are considerably less attractive than Google's because they draw a smaller base of users and advertisers. A hard lesson for Zuckerberg: Every decision has consequences, and pursuing his whims has costs.

AdWeek's Brian Morrissey reports that "Microsoft banners will run across the site, but will no longer appear on the homepage and user profiles." Instead, Facebook's largely automated direct-sales operation will sell placements for one large slot or two smaller slots on the right side of each page. These ads might be video ads as well as static text over image ads, Morrissey reports. A source tells us Facebook's ad units are also changing to a more standard size — a move that will make them easier to sell.

One has to think this is why Facebook CEO Mark Zuckerberg hired Sheryl Sandberg as his COO. Up until now, instead of visibly rationalizing Facebook's wild-and-wooly ad operations, Sandberg's been flexing her muscles inside the company by extinguishing all signs of fun, from games of beer pong to all-night hackathons. At last, she's taking out her Machiavellian will to power on a deserving target: Big, bad Microsoft.

No wonder. From a Facebook Developers' blog post

Because we want you to follow a more normal sleep schedule than we Facebook engineers swear by, the Hackathon won't last all night long, and instead will be held from 3pm till 11pm.

According to Sarah Lacy's Once You're Lucky, Twice You're Good, those hours means this year's F8 hackathon doesn't deserve the name:

The hackathon is a hallowed tradition at Facebook. It starts when someone in the course of any workday calls for a hackathon. This usually happens about once a month. Anyone except Zuck can call for one. They settle on a night, and over junk food, beer, and Red Bull, Facebook's corps of engineers stays up all night coding. A hackathon has only two rules: the project has to be something cool and it couldn't be something they'd normally work on. Once the sun comes up, they all go to breakfast somwhere together and then they crash the entire next day. All meetings on that day are canceled. [Zuckerberg] knows they could get the same production just working a normal day, and it wouldn't screw up everyone's sleep schedules. But he could never replicate this esprit de corps.

The whole point, in other words, is screwing up people's sleep. But how would you expect an aging flack like Schrage to understand such fine points of hacking?

There may be some wisdom here nonetheless. With animosity brewing between third-party Facebook platform developers and the social network, perhaps trying to create "esprit de corps" between the groups with a groggy all-nighter would have just made things worse. Still, we're sure Zuck is sad to see the F8 hackathon go. The early bedtime means he won't have a chance to replicate last year's "John Hughes moment" with girlfriend Priscilla Chan, also documented by Lacy:

Long after the keynote was done and everyone left was hacking away, Zuck and Priscilla were walking hand in hand, amidst a floor of empty chairs, locked in quiet conversation. The scene was more like a moment from a John Hughes move than the pivotal point that would rock Silicon Valley's startup world. As if they were going to start to slow-dance at any moment.

In a word, no. Despite improved targeting, click-through on Facebook ads remains abysmally low, at about 0.045 percent, CPM Advisors reports. The rates on those ads is similarly rock-bottom; Facebook's automated ad-selling systems suggest advertisers bid a CPM, or cost per thousand pageviews, between $0.21 and $0.27.

Most of Facebook's inventory is junk. And Facebook's new design may help take out the trash. It's no surprise users don't click on ads on profile pages; there's too much else to do. The new profile centers on users' news feeds, a constant report of their activity on Facebook — and, increasingly, on other sites across the Web, like Digg and Flickr. (This latter bit, called Facebook Connect, is a reinvention of the troubled Beacon feature, which met a frosty reception last year for being overly invasive of Facebook users' privacy.)

To the extent Facebook users see ads on the new profile pages, it seems likely they'll be disguised as reports about your friends in your news feed. (Did you know your friend went to see that new movie? Maybe you'd like to buy a ticket, too.) Or not: We hear Zuckerberg, who once championed these ads as a once-every-100-years change in media, has now soured on them.

One has to think conventional ads won't disappear entirely from Facebook. The social network has a multiyear agreeement to let Microsoft sell ads on the site, for one; having already renegotiated that deal in the course of getting a $240 million investment, Facebook would be hard-pressed to change it on Microsoft once again.

But make no mistake: Taking banners off users' profiles is a bold bet. The new profile design emphasizes the news feed — and, presumably, the friend-centered ads that appear within it. Those ads are difficult to sell, and difficult to place; they require vastly more computing power than the keyword matching Google has used to make billions of dollars. If Facebook can master this, it might actually be worth $15 billion, or more. If it can't, its value will be much closer to zero. Good luck, Zuck.

Update: The ads are back — but the mystery over their disappearance remains.

If that's the case, Zuck needs to hurry up and buy in. Venture capital for Facebook-application startups is drying up. One way Facebook could make its hangers-on flush again would be with a payments system which allows users to buy and sell things — two activities we've heard many experts consider crucial to any economy.

There are two valuations for startups like Facebook — the one set by the company's most recent investment round and an internal one, often lower, established for tax purposes. Why the discrepancy? For one thing, Microsoft bought preferred shares, with some liquidation rights, while employees get common shares, which could get diluted. Going by the reports, it sounds like common shares are the ones up for sale. There's also no established market for Facebook stock; shares that are hard to unload get discounted accordingly.

The selling spree does reinforce what we already know: Shareholders — including employees, some of whom even took to cheating the company out of a $600 housing subsidy — want Zuckerberg to hurry up and sell or take the company public.

Too bad for them. Zuck controls three-fifths of Facebook's board and is in no hurry.

The silver lining: The difficulty in placing their shares with a buyer may pay off in the long run. Instead of selling their Facebook shares at a discount, these shareholders will probably have to hold on to them and — despite themselves — make a whole lot of money when Zuckerberg finally does take the world's most popular social network public. Just so long as Facebook's sales team keeps treating ad buyers to juicy steaks.

Through voting rights, Zuckerberg controls both the seat Andreessen fills and the remaining vacancy, so it's not surprising to see Zuckerberg picked an entrepreneur-friendly, don't-sell-if-you-don't-have-to mentor like Andreessen to join the board. Some Facebook shareholders are already offloading stock, perhaps growing impatient with Zuckerberg's slow progress toward an IPO. Other CEOs might be worried about retaining investors' goodwill. Zuckerberg, free to pack the board with another ally after Andreessen, doesn't have to. Jealous?

Apparently, in October 2007, Facebook and Microsoft issued a press release stating Microsoft would “take a $240 million stake in Facebook’s next round of financing at a $15 billion valuation.”... Defendants [Facebook] proffer evidence that subsequent to the press release, in the regular course of its operations, Facebook’s Board of Directors determined a value of the company’s “shares” which was different than the valuation disclosed in the press release.

So while Facebook was happy to sell 1.6 percent of the company to Microsoft for $240 million for a $15 billion valuation last fall — and tell the press all about it — remember, that doesn't mean the company is actually worth $15 billion. In fact, a Silicon Alley Insider commenter reports: "Try $2 billion to $3 billion. An owner is out trying to peddle common stock to VC's right now. The price is under $4 billion for sure."(Photo by AP/Ruttle)

What would have happened had Rachel Marsden was left with more than just a few articles of clothing after those steamy days with Wikipedia founder Jimmy "Jimbo" Wales? Nothing good.

I have to admit, out of all the babies, Marissa Mayer and Zach Bogue's faux-offspring is the least horrifically ugly.

"IT Girl" Julia Allison is ostensibly dating I'm In Like With You founder Charles Forman. But with that lack of resemblance, could Allison be covering for another lover?

Because Forman and Tumblr founder David Karp are very, very close. Looks like Allison is just the beard and Karp is the Forman baby's daddy.

Founder Mark Zuckerberg doesn't want to make the move, preferring Palo Alto's quaint Main Street USA feel to the parking-lot archipelagos up and down the peninsula which house the likes of Google and Yahoo. But Zuckerberg doesn't make business operations decisions anymore. Those belong to Facebook's new adult-supervision, ex-Googler COO Sheryl Sandberg, who is charged with scaling the company. If Zuckerberg's allies CTO Adam D'Angelo and Matt Cohler can't or won't survive Sandberg's tough-love rule, then neither will Facebook's dank, cluttered and spray-painted home on University Avenue. (Photo by by antony_mayfield)

The school already had an online database known as the facebook ... The fact that a couple of other students had the same idea at the same moment doesn't mean he is a thief. And the fact that many consider Zuckerberg a grade-A asshole doesn't mean he did anything illegal. "There are lots of things that an average person might consider reprehensible that aren't against the law," says James Boyle, who co-founded the Center for the Study of the Public Domain at Duke Law School. "I'd warn against assuming that the 'Ew, what a slimeball' reflex be equated with what is illegal."

Zuckerberg's immaturity and megalomania might make him intolerably arrogant to anyone around him, but that's pretty much what the Valley rewards. So unless it gets in the way of his management of the company (which it may yet), he has nothing to worry about.(Photo by Andrew Feinberg)

Users got angry when Facebook dropped the News Feed on them out of nowhere in the fall of 2006. Developers are still grumbling about the pending redesign. Now, when Facebook introduces a change, it's announcement by slow drip — tremendously boring. Just like a Zuckerberg keynote. If Zuckerberg really wants to be like Jobs, he's going to have to stop worrying about the users, stop worrying about the developers, and start trusting his gut. Jobs displays utmost confidence in how his fans will receive his products — and that, not his presenting style, is what makes him so compelling.

(Photo by AP/Ruttle)