"So one of the things that I've been lucky about in building this company is ... I kind of have voting control of the company, and that's something I focused on early on. And it was important because, without that, there were several points where I would've been fired. For sure, for sure," the 35-year-old multi-billionaire CEO said in leaked audio from internal meetings published in part by The Verge on Tuesday.
The audio obtained by The Verge is from two July question-and-answer meetings with employees and lasts about two hours.
Zuckerberg also said if he didn't have such singular power, Facebook likely would not have become the behemoth it is today.
"I think a lot of the concerns are that people think that our company is very powerful. And within that, the fact that I have voting control of the company...," Zuckerberg said.
But, he said, that "concentration [of power] within a person" has been "very valuable."
TWEET: Today we're publishing highlights from two hours of leaked audio in which Mark Zuckerberg rallies Facebook against critics, competitors, and Sen. EWarren. It's a fascinating look at a company under siege.
To illustrate his point, Zuckerberg talked about two unpopular decisions he made that worked out in favor of the company.
First, in 2006, Yahoo wanted to buy Facebook. Zuckerberg refused, despite almost everyone else at the company wanting to cash out.
"Yahoo came in with this big offer for a billion dollars, which ... was going to, like, fulfill everyone's financial dreams for the company. And I was like, 'I don't really think we should do this.' And everyone was like 'What?'
"And at the time, we had 10 million people using Facebook, and Myspace had 100 million people, and it was growing faster," Zuckerberg said in the audio. "And if you believe all the arguments about network effects, there's no chance that we should've been able to compete." ("Network effects" refers to a concept where a platform or product becomes better and more valuable to users and as a company as it gets bigger, according to noted venture-capital firm Andreessen Horowitz.)
"In 2006, when Yahoo wanted to buy our company, I probably would've been fired, and we would have sold the company. We wouldn't even be here if I didn't have control," Zuckerberg said.
Zuckerberg also pointed to moves Facebook made in 2018, including a change in the algorithm that determines what appears on users' news feeds. The change prioritized posts by friends and family over viral videos in order to make sure users had "more meaningful social interactions," according to Zuckerberg's January 2018 Facebook post announcing the change, and a better experience on the platform.
Zuckerberg said he may not have been able to make that decision without complete control, because he predicted (even as he announced the change) that it would reduce the time people spend on Facebook and cause "some measures of engagement" to decrease.
"We made a series of changes, including one that took out 50 million hours of viral video watching a day. For that and a number of other reasons, the next quarter when we reported earnings, we lost [more than] $100 billion of market cap in a day, and it was the biggest single drop in business value of any company in the history of at least our country, maybe the world," Zuckerberg says in the audio.
"So this was a really big thing. So again, would I've been able to do that if I didn't control the company? I don't know. Maybe I would've been fired but ... Over the long term, it really is profitable to do the right thing," Zuckerberg says. (Facebook stock closed at at $174.60 on Wednesday, $13.17 lower than the day the algorithm change was announced in January 2018 and $1.66 lower than its closing price the day that the company lost over $100 billion in market capitalization in July 2018.)
Another Facebook co-founder, however, has called Zuckerberg's absolute power dangerous.
"It's [Zuckerberg's] very humanity that makes his unchecked power so problematic," Chris Hughes wrote in an op-ed for The New York Times in May. "Mark's influence is staggering, far beyond that of anyone else in the private sector or in government. He controls three core communications platforms — Facebook, Instagram and WhatsApp — that billions of people use every day. Facebook's board works more like an advisory committee than an overseer, because Mark controls around 60 percent of voting shares."
Facebook owns Instagram and WhatsApp, and because Zuckerberg owns the majority of the shares that can cast votes, he determines the way Facebook operates. And that, in turn, affects billions of people around the globe. More than 2.7 billion people use at least one of the Facebook properties — Facebook, Instagram, WhatsApp, or Messenger — each month. (For example, the Cambridge Analytica scandal affected tens of millions of Facebook users' personal data.)
"Mark alone can decide how to configure Facebook's algorithms to determine what people see in their news feeds, what privacy settings they can use and even which messages get delivered," Hughes wrote. "He sets the rules for how to distinguish violent and incendiary speech from the merely offensive, and he can choose to shut down a competitor by acquiring, blocking or copying it."
"Facebook accepts that with success comes accountability," Nick Clegg, Facebook's vice president for global affairs and communication, wrote in a statement to the New York Times about the op-ed, which called for the dismantling of Facebook by spinning off Instagram and WhatsApp. "But you don't enforce accountability by calling for the breakup of a successful American company."
Zuckerberg will fight to keep the power which he believes has been good for Facebook, according to the leaked audio. If Sen. Elizabeth Warren were to get elected President and try to break up Facebook, Zuckerberg predicts a "legal challenge" which he said would "suck for us."
"But look, at the end of the day, if someone's going to try to threaten something that existential, you go to the mat and you fight," Zuckerberg said.
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