The great hope of the Valley, the startup everyone thought was the next Google, the company whose IPO might restart the stock-market gold rush for everyone, is not well. Why? Look to its founder. Mark Zuckerberg is mismanaging his creation's transition to greatness. In Facebook's own parlance, the company's plight is "complicated." It will take in $300 million to $350 million in revenue this year, thanks in part to a lucrative ad deal with Microsoft. But its $15 billion valuation is premised on a far brighter future — a future that may never materialize. The biggest symptom of Facebook's ailment is the flight of technical talent. In the Valley, success attracts smart people, who attract other smart people. Yes, they're after money, too, but having brilliant coworkers counts for a lot. These great minds bond and form, yes, a sort of social network of their own. When they leave, the network frays, weakening the company's ability to attract new talent.That's why, for days before it was announced, top executives at Facebook desperately hid technical lead Dustin Moskovitz's plans to leave. They dithered as Mark Zuckerberg tried to persuade his cofounder and college roommate to stay, and others, led by COO Sheryl Sandberg, concocted a plan to spin his departure. That spin has now been dutifully printed in the pages of the Wall Street Journal: Facebook's changes are the "type of evolution you see among young growing companies and specifically young growing companies in Silicon Valley," company flack Larry Yu told the paper. Sandberg, who closely directs the company's PR, would have us think that the uproar that has taken place at the social network since her arrival is a healthy evolution. It is not. The internal politicking she has introduced to the company is destructive, and has sent many of the company's best and brightest fleeing. The list of the departed includes data guru Jeff Hammerbacher, product VP Matt Cohler, platform director Ben Ling, and most recently, Justin Rosenstein, a top engineer who's leaving with Moskovitz. Operations VP Jonathan Heiliger may be next. The defections all hurt. But most of the blame lies with Zuckerberg himself. Zuckerberg has always styled himself as the company's "founder," relegating the likes of Moskovitz and Chris Hughes, now Barack Obama's Web campaign director, to "cofounder" status. Never mind that this distinction doesn't exist in English; those who start a company are all equally founders. Zuckerberg clearly considers himself first among equals; he once referred to Moskovitz as "disposable" and a "soldier." The former Harvard roommates patched over those insults, and Zuckerberg said he will rely on Moskovitz's counsel even after his departure. If Moskovitz really thought he could guide Facebook's evolution, he would have stayed at the company, right? Zuckerberg has a history of churning through confidants. Napster cofounder Sean Parker helped establish Facebook in Silicon Valley as its president, only to be disappeared from the company. Former COO Owen Van Natta was in favor, then out. Sandberg had his ear for a while, but may be losing it. Lately, I hear he favors Christopher Cox, the twentysomething recent Stanford grad he recently tapped as the company's director of product. We'll see how long he stays by Zuckerberg's side. This fickleness may be predictable from a 24-year-old. But it's fundamentally bad for the company. Yahoo thrived, in its early days, on the partnership between CEO Tim Koogle and founders Jerry Yang and Dave Filo. Google's triumvirate of its cofounders and CEO Eric Schmidt improved on that management form; the troika lends the company some stability by making sure decisions at the top are never unilateral. Zuckerberg's insistence on the "founder" title suggests that he always planned to rule the company alone. It's a bad plan. His instincts on what kind of website will attract a 100 million users have been spot-on. But he has no business sense. At one point during the Facebook redesign process, he suggested getting rid of advertising altogether, having grown disillusioned with both old-style banner ads and the company's experiments with targeting ads to users' behavior. Will Zuck ever find an equal partner, a sounding board who can help him turn Facebook into the large, ongoing concern he envisions? Dustin Moskovitz may not have been the right person. Nor, it seems, is Sheryl Sandberg. Yet to staunch the bleeding of Facebook's technical talent, Zuckerberg will have to find someone to ground him — someone for whom he has enduring respect, who can moderate his worst impulses. Without it, there will be one word describing what's going to happen to Facebook: "founder."

Having completed his vision quest in India, Zuckerberg is now moving on to the requisite Eurotrip. Shown here guest-lecturing at the Technische Universität-Berlin, he's also expected to speak at an invite-only function in Munich. These trips might not seem peculiar, given Facebook's international expansion. But there is one odd pattern we've noticed.Every time Zuckerberg skips town, bad things happen at Facebook. Is it because he doesn't want to be seen as the bad guy as his former comrades in arms leave the company? We're not saying Facebook employees should worry every time they see the boss surfing Expedia. But we are wondering if this isn't a trend. Tip to the Z-Man: don't go overboard at Oktoberfest. (Photo by cpthook)

Will the last tech executive to leave Facebook please turn off the lights at the datacenter? We hear Jonathan Heiliger, Facebook's operations VP charged with running the social network's expansive server network, has been interviewing for other jobs. He just completed a year at the company, which is usually when employees' stock-and-options packages begin to vest. Odd: We thought Heiliger might be happier at the company with the appointment of Marc Andreessen to Facebook's board.Heiliger previously worked for Andreessen at Opsware. One would think the chrome-domed entrepreneur, now chairman of Ning, would prove a powerful ally in the fierce political battles that have roiled Facebook since the appointment of Sheryl Sandberg, a Beltway insider turned Internet executive, as COO. Nothing's certain, and Heiliger may well stay. But for him to be so unhappy as to openly entertain job offers? The social network's executive suite seems to be coming unplugged.

When he announced his cofounder and college roommate Dustin Moskovitz's departure from Facebook, CEO Mark Zuckerberg didn't say what he would be up to. But in a separate email leaked to Valleywag, Moskovitz hints at his plan: With fellow engineer Justin Rosenstein, who's also leaving the company, he hopes to create tools like the ones he built at Facebook to run its internal operations, and market them to all sorts of companies. Here's his note to colleagues:

CEO Mark Zuckerberg has just informed Facebook's staff that his long-restive cofounder, Dustin Moskovitz, is leaving the company. Adding to the blow: Moskovitz, left, is taking with him Justin Rosenstein, right, a top engineer who was one of the first employees Facebook poached from Google as it began its tumultuous rise in 2007. The two are starting a new company together. Rosenstein wrote a much-circulated email to friends explaining why he'd left Google, with the now-famous line, "Facebook really is That company.... I have drunk from the kool-aid, and it is delicious." Rosenstein's note is worth rereading — keeping in mind that, if he's leaving, Facebook must no longer be the company Rosenstein wrote so enthusiastically about:

More bad news from the slave galley otherwise known as FriendFinder Networks, the renamed Penthouse publisher whose Adult FriendFinder site's ads grace numerous porn sites. The company lost its top sales performer, Greg Chan, to World NetMedia, proprietor of surging competitor Fling.com. He probably wasn't very happy working with marketing VP Charlyn McNamara. To get a sense of McNamara's management style, consider the case of senior sales veteran Sondra Moore: Moore walked into McNarama's office to ask for more challenging work. Most bosses reward employees who show initiative and a willingness to take on more responsibility. McNamara's response? She fired Moore. And it gets worse from there.COO Anthony Previte, after threatening to fire everyone in operations, has still not been able to hire more engineers or systems administrators. And the design team has lost all respect for their manager, director of user experience Shawn Whitfield, who's made it clear that anyone who questions his authority will be let go. But hey, the employees that stick around are going to get rich when FriendFinder Networks finally goes public, right? Not so much. Non-executive employees were each granted 10,000 options, regardless of seniority. And they come with a five-year vesting period — one year more than is typical. After the departure of founder Andrew Conru, it's been nothing but petty politics among executives and upper management, according to our source, who added, "You never know who you can trust. That's the whole [Adult FriendFinder] attitude: Trust nobody." It sounds like Penthouse inherited a bad situation that's gotten even more toxic since it bought the company.

A truism of PR: Get all the bad news out at once. Etelos, a startup Web-applications marketplace, fired its CEO, Jeff Garon, last week, but didn't bother to tell shareholders until Wednesday. Founder Danny Kolke, the company's CTO, has taken back control for now. But that's not all: A tipster tells us the company may be closing its San Mateo headquarters and relocating to the company's Renton, Wash. office. The move seems sudden: Garon's last blog post, dated September 1, is titled, "Remember what can be replaced." He didn't include himself on the list.I don't know much about Etelos, but I find this much curious: Before joining Etelos, Garon was CFO at a company called Tripath Technology. Garon quit in 2006, and Tripath filed for bankruptcy last year. Etelos hired Garon a year ago, and opened up an office in San Mateo. In April, Etelos went through what's called a reverse merger with Tripath, whose shares still traded over the counter — a somewhat messy maneuver to give Etelos a public listing at a time when few tech companies were going through conventional IPOs. Oh, and Garon seemed easy with money when it came to burnishing his image; our tipster said he spent $155,000 of the company's cash on a "diamond sponsorship" at the Web 2.0 Expo conference, which gave him a speaking slot as a perk. Anyone know more?

Earlier, BoomTown reported that MSN exec Jeff Dossett would leave the company and possibly soon join Yahoo, where his longtime friend and fellow Microsoft alumna Joanne Bradford already works. Not true, says a Microsoft flack, who tells us: "Jeff Dossett is leaving his position as MSN’s US Executive Producer to seek other opportunities within Microsoft." So either Swisher got it wrong, or Yahoo got outbid for Dossett's services at the last minute. Given Swisher's red phone access to Yahoo's inner sanctum, we're guessing the latter is true. We haven't spoken to Dossett, who once climbed Mount Everest to raise awareness for AIDS and HIV in Africa, but we imagine if we did he'd say something like: "Join Yahoo, now? Too risky."

There are plenty of entrepreneurs with brilliant ideas at Yahoo. They just have to leave the company before they can do anything about them. Take Ex-Yahoo Travel general manager Yen Lee. He left the company a year ago and founded travel search engine UpTake. After a $4 million first round in December 2007, he's just landed another $10 million. Trinity Ventures and Shasta Ventures led the round, which follows UpTake's $4 million first round last December. The difference between UpTake and Lee's old gig running Yahoo Travel? UpTake's focus is content from third-party sites like TripAdvisor, Expedia and yes, Yahoo Travel. Which of course means UpTake would fit quite nicely with Yahoo president Sue Decker's whole "open" strategy for Yahoo. Perhaps what she's really holding open is the door to the exit.

Michael Carroll, a twenty-year veteran of technology publisher IDG who served as SVP and group publisher of both PC World and Macworld, has resigned, according to a source. The departure comes after a round of layoffs, the departure from PC World of Editor-in-Chief Harry McCracken and, our source says, considerable churn in the executive ranks:

Looks like we might not be hearing from Republican Party apparatchik Carly Fiorina about how awesome the party's presidential ticket is any time soon. The former Hewlett-Packard CEO was asked by a St. Louis radio host if she felt vice presidential nominee Sarah Palin had the experience to run a major company like HP, and Fiorina replied "No, I don't. But you know what? That's not what she's running for." When she was later asked about that statement, she replied that presidential nominee John McCain wasn't capable of running a large company, either — but then neither is Democratic nominee Barack Obama or his running mate Joe Biden, in Fiorina's opinion. I, for one, appreciate Fiorina's optimistic assessment, since the current president promised to run the nation like a company back in 2000, and we all know how that turned out.

Chadrick, Chadrick, Chadrick. Most of all, we loved saying his name. Chadrick Baker, the virtual-worlds enthusiast Valleywag plucked from obscurity to be our mascot, has been fired from his day job. We think. He should have known better than to bite the digitally furry hand that feeds him. After Chadwick called a competitor — we're not sure, we don't follow the fancy 3D game worlds he runs in — a "hack" in a barely read interview, his CEO, Peter Haik, had to step in and disown Baker's comments. After Haik emailed the company Baker dissed and said he couldn't be sorry enough for what had been said, we hear he took all his apologies one step further and let Baker go.Not that anyone at Baker's maybe-former employer Metaversatility will confirm that. I wondered why they even bothered to let me get past the GrandCentral answering service prompts if the fellow who picked up was going to flatly answer "No comment" to every question I asked. Why not just have a bot handle the media calls? Especially after this last round of press. Not that it matters: Baker's own LinkedIn profile shows he's no longer employed by the incomprehensible company he couldn't resist pitching us. Not to rub it in, Chadrick, but we've got some more bad news for you. Your Valleywag mascot duties? You've just not been up to snuff for ages. We were hoping for Scoble-level pageviews from you. While we are still in search for a successor, we've relieved you of your post immediately. Readers, your nominations are welcome in the comments.

LinkedIn's jobs page gives off the impression that life at the business-networking website is one nonstop Rock Band jam session. But a clearly disgruntled, entertainingly foulmouthed tipster says that backbiting is the real office entertainment of choice. The company's operations department is "like a fucking morgue" after a "housecleaning," he says. Lloyd Taylor, the company's vice president of technical operations, a splashy hire from Google last year, seems to have generated more than his fair share of complaints. In company meetings, CEO Dan Nye and founder Reid Hoffman describe the ruckus as "culture changes." Embarrassingly for a company which says it helps employers vet job candidates and is trying to break into the recruiting business, these problems sound less like culture clashes and more like plain old bad hires. The tip:

We'd heard, on good authority, that Monty Widenius, creator of the popular open-source database MySQL, the foundation of most modern Web apps, had quit Sun, not long after the server maker's $1 billion purchase of his company. MySQL's designated community panderer, Kaj Arnö, muddied the waters with a maybe-he-will-maybe-he-won't blog post. Now, at last, via Infoworld, an explanation: Widenius is negotiating with Sun for a new role at MySQL. Which raises the question: Was he ever really planning to leave, or was he just telling people that to see how his corporate overseers would react?

With tyrannical founding CEO Jason Goldberg gone, Seattle-based Jobster is looking to replace departed CTO Phil Bogle. Rather than use its own job-listings product, the company has contracted a headhunter to make some calls. Meanwhile, they're letting go of less senior employees from departments like sales — leaving an office space in a waterfront building that can reportedly hold 200 with only 15 employees, nine of whom are executives and admins and six of whom are engineers. Oh, but it's hiring more, with the money new CEO Jeff Seely managed to raise in a $7 million fourth round of funding. Even with that infusion, Jobster can't be long for this world.Jobster gave away much of the farm when it raised its third round, way back in 2006. The $18 million third round brought the total raised to $48 million, but on a valuation only a little over $100 million — meaning there's probably little equity left to sell to investors. The $7 million secured in April was likely a "down round," or offered on an even lower valuation. Investors were probably looking to snap up what equity was left and keep the company going for just long enough to sell to someone. Anyone. Please. But if they're trying to cut the burn rate through layoffs, why is the company maintaining such a large office on the sixth floor in a prime Seattle location looking out over Elliott Bay? Our source was incredulous. "This makes no sense to me at all. No matter how good a deal they have, office space for 20 people would cost less on a cash basis." Maybe as a showpiece for possible acquirers? If that's the case, I'd take a cue from when the Mariners played in the Kingdome and the upper deck was always empty — cover the empty cubicles with a festive covers and bunting to keep it from looking like a mausoleum.

Cuil, the would-be Google killer backed by Wal-Mart family money, has lost one of its highest-profile executives, Louis Monier. Monier, Cuil's VP of product, founded AltaVista and previously worked at eBay and Google. and VP of product Louis Monier just a month after the site's public launch. "We’ve heard but haven’t confirmed that he and CEO Tom Costello just couldn’t agree on the Cuil product road map, and that the botched launch didn’t help things much either," TechCrunch reports. Cuil had a road map? It must have pointed to a dead end. In August, Hitwise reported Cuil had 0.007 percent of the U.S. search market.

New CEO Paul Maritz, formerly of Microsoft, may have just taken the helm of a sinking ship in VMware. CEO Diane Greene was unceremoniously ousted by chairman and CEO of corporate parent EMC Joe Tucci last month, leaving no women navigating any top Valley companies. Her husband, cofounder and fellow sailor Mendel Rosenblum to whom Tucci offered the CEO job and a board seat, has now officially resigned; product development VP Paul Chan soft-quit and will be gone by October; and VP of R&D Richard Sarwal moved to competitor Oracle last week (where, thanks to a recent California court decision, he does not have to honor any non-compete agreements).Rosenblum has been on vacation for a month after Greene's firing, possibly to lessen the bad publicity ahead of VMworld 2008 in Las Vegas which starts next Monday — while Microsoft has been busy introducing its own virtualization technologies in a barnstorming campaign this week. My advice to Greene and Rosenblum? Sell those pre-IPO options as soon as you can, because the stock is bound to dip below the initial price sooner rather than later.

After just over a year on the job, deeply unqualified top Yahoo ad-sales executive Dave Karnstedt is leaving the company — to "pursue other opportunities," specifically as an yes-man executive-in-waiting at Redpoint Ventures. Replacing him at Yahoo will be Joanne Bradford, who only quit her ad sales post at Microsoft to become an EVP at at Los Angeles-based ad network Spot Runner in March. Tellingly, she'd been commuting to the job from the Bay Area, and employees at Spot Runner tell us Bradford didn't spend much time in the office.Bradford will report to Yahoo EVP Hilary Schneider, according to Kara Swisher. During her short tenure at Spot Runner, the company abandoned its original plan to help small businesses buy customized TV ads and laid off 50 in the process. That tumultuous experience should help prepare Bradford for Yahoo, according to a tipster who tells us "most of [Karnstedt's] lieutenants will be leaving with him shortly," and adds: "Taking bets on the next layoff announcement? 4 days before Q3 earnings. Jerry steps down too."

Why doesn't News Corp. CEO Rupert Murdoch just make it official? His wife, Wendi Deng, serves as "chief strategist" for MySpace China, the media conglomerate's Internet outpost in her homeland. MySpace China CEO Luo Chan has just quit. Just promote her already, Rupert! You're not going to have any luck recruiting an outsider to fill the spot, when it's obvious Deng runs the show. And you'll never hear the end of it from her until you do. (If you're not familiar with Deng's colorful history before she married Murdoch, you should read up on it, courtesy of a pre-Murdoch Wall Street Journal article.)

Ah, schadenfreude: Vibrant Media, the company responsible for those "IntelliTXT" ads that appear disguised as hyperlinks in the middle of articles and pop up if you accidentally mouse over them, is enduring executive turmoil. Sean Finnegan, an advertising executive who joined the company as "chief media officer" in January, is leaving the startup for Publicis. Such a big title, such a short stint! But Vibrant's executive ranks are stuffed with ridiculously puffy titles. A suggestion for Vibrant: Try making your ads, and your business cards, less obnoxious.