LESLEY STAHL: This is the face of Facebook, Mark Zuckerberg, the mogul who's guiding its extraordinary growth. What everyone wants to know is, is he old enough to be running a company some people say is the biggest thing since Google?

LESLEY STAHL: Tell everyone how old you are.

MARK ZUCKERBERG: I'm 23 right now, so...

STAHL: And you're running this huge company...

ZUCKERBERG: it's not that big.

STAHL: ...And you're 23. And here he was helping me set up my own Facebook page with a profile of my likes and dislikes. Guess what my favorite TV show is.

ZUCKERBERG: I can't.

STAHL: Duh. All right. Put "60 Minutes" there. (laughs) Next, we added my friends, family - that's my son-in-law - old classmates. Within a few minutes, I got a friend request. Here's a guy I haven't talked to in two years, and I'm so thrilled to hear from him. This is why so many find the site addictive. In a world with no cell phone or e-mail directories, Facebook has become a way to find lost friends.

ZUCKERBERG: It used to be the case, like, you'd switch jobs, and then maybe you wouldn't keep in touch with all the people that you knew from that old job, just because it was too hard. But one of the things that Facebook does is it makes it really easy to just stay in touch with all these people.

STAHL: Of course when someone friends you, you can ignore them. And privacy settings allow you to deny access to your page, say, to your boss or your parents.

(phone ringing) Good afternoon. Facebook. How may I help you?

STAHL: Facebook headquarters in downtown Palo Alto looks like a dorm room. The 400 employees who get free food and laundry show up late, stay late, and party really late. Zuckerberg, who's made the cover of "Newsweek" and is reportedly worth $3 billion, sits at a desk like the other software engineers, writing computer code. Have you changed your lifestyle? You don't look like you're you don't look like you're buying really expensive clothes?

ZUCKERBERG: No, i'm not buying really expensive clothes. (laughs)

STAHL: Are you buying things that you would be...

ZUCKERBERG: Yeah. No, I have a little, like, one - bedroom apartment with a mattress on the floor. That's where I live.

STAHL: It's almost like a Disney movie - 23-year-old kid takes over major company.

KARA SWISHER: Right.

STAHL: Kara Swisher, who used to write about Silicon Valley for "The Wall Street Journal" and now has a blog, "All Things Digital," has called him "The Toddler C.E.O." What do you think it's done to him as a person, to be 23 years old...?

SWISHER: I think it's hard. I think when all of a sudden you're the smartest person in the world and you're the meal ticket for everybody, and this is a big hit, this is the new Google at this point. And so Mark is under a lot of pressure, because everybody wants something from him.

STAHL: Like the founders of Google, Larry Page and Sergey Brin, Mark Zuckerberg is looked up to in Silicon Valley as a visionary. You seem to be replacing Larry and Sergey as the people out here who everyone's talking about. You're just staring at me.

ZUCKERBERG: Was that a question?

STAHL: We were warned that he can be awkward and reluctant to talk about himself. So we turned for help to his Facebook page, which says he's a Harvard alum. You're not a harvard alum.

ZUCKERBERG: That's true. We don't have a setting for dropout.

STAHL: He dropped out of Harvard in 2004, where he was intending to study psychology. His mom is a psychiatrist. Here she is on Facebook. His dad's a dentist. Mark was a computer whiz early on, writing software in sixth grade. In his second year at Harvard, he built a site where students could rate, or bate, the looks of classmates through I.D. photos he lifted off Harvard's..computers. You got into deep trouble from this little prank.

ZUCKERBERG: Well, Harvard was just not happy that I was using their images.

STAHL: Well, they said you hacked.

ZUCKERBERG: Uh-huh.

STAHL: Did they punish you?

ZUCKERBERG: Yeah, I was put on some sort of... I don't know what you call it.

STAHL: Probation?

ZUCKERBERG: Sure.

STAHL: Soon thereafter, he and his two roommates created an online version of the harvard student directory where kids could message each other. They called it "the Facebook," and launched it from their dorm room. Within four months, they had expanded to 40 colleges, and over the summer, moved to palo alto. But mark had done code-writing for some upper class menith a similar idea, and they have filed a lawsuit. Three harvard students are suing you, claiming that you stole their idea for Facebook.

ZUCKERBERG: Well, I mean, we know that we didn't steal any ideas or code, so we're just kind of waiting until that comes out in court.

STAHL: In the lawsuit, they claim that you were duplicitous. Are you worried about it?

ZUCKERBERG: No, I don't really spend a whole lot of my time worrying about that. I mean, we have lawyers at the company who deal with that stuff. And it's just... it's not a huge concern. About half my time is spent on business operation type stuff.

STAHL: Despite his young age, Zuckerberg seems to have made one savvy business decision after the next. He expanded access to Facebook from college students to high schoolers; then in 2006, to adults, his fastest-growing demographic. Now, he's inviting everyone on the site to create new software and pocket the profits themselves. It's a way to keep the next big...thing on Facebook. New programs emerge daily, like Facebook scrabble.

ZUCKERBERG: I actually have a couple games going on now with my grandparents. So, they got on Facebook and we started playing scrabble together.

STAHL: So, Facebook is changing the way we communicate with our friends and with our grandparents. It's also changing politics. Every major candidate has a page. Zuckerberg says there seem to be more republicans on the site than democrats. And among them, Barack Obama, with his young persons following, is hugely popular. Hillary Clinton is hugely unpopular. It used to be, first, you went on "Face the Nation" if you were a candidate; then, you went on "Letterman." now, it seems the candidates have to be on Facebook. Are you changing the way candidates are running for president?

ZUCKERBERG: Well, I think, because politicians can communicate with tens of thousands of people at the same time, is pretty effective for them in campaigning.

STAHL: Facebook is growing so quickly, there's talk of it becoming a giant-slayer. Is Facebook a challenge to Google?

CHARLENE LI: I think they are.

STAHL: Charlene Li, an analyst at Forrester Fesearch, a technology consulting company, says Facebook is a threat to Google because it could become the first site people go to to search. Say you want information about a family vacation in Maui. Li says when you check Google, you could get a list of almost 200,000 hits.

LI: Versus I can go on Facebook, I can go and ask my friends. And people will write back to me, "Oh, I've done things, and this is what I recommend. And knowing yoand your kids, they would really like doing this." So, the next time I do something very specific like that, chances are I'll probably go to Facebook.

STAHL: Which is why Yahoo offered to buy Facebook in 2006 for $1 billion in cash. Zuckerberg declined. But then Microsoft swooped in and bought 1.6% of the company for $240 million. That meant that Bill Gates valued Facebook at $15 billion, roughly the same as ford or CBS. Some analysts say that's wildly unrealistic, since Facebook has yet to figure out how to make money off its huge audience. Is it true that you don't make that much money?

ZUCKERBERG: I think that's a pretty relative thing. But, I mean, as a private company, we just have the advantage of not necessarily having to report to the outside world all of our financials.

STAHL: He may duck the question, but there's no getting around the fact that Facebook needs to find a way to generate revenue, and so Zuckerberg is experimenting with ads, trying to cash in on his users' own recommendations. Say you write on Facebook that you like a certain movie. That's turned into an ad. Or maybe you like a scarf from Bloomingdale's.

ZUCKERBERG: So, this isn't an ad that's going to go to a lot of people. Basically, it... when you put that information in your profile that you bought a scar and that you like that scarf, that's something that your friends might find interesting, right? So, what we'd do is we might show that information to your friends a little bit more proactively as an ad. Right? So...

STAHL: But with me in the ad?

ZUCKERBERG: Yeah, but that would basically be the ad.

STAHL: Okay. But it's almost like an endorsement, like Michael Jordan for Nike. I become the spokesman for that ad.

ZUCKERBERG: Well, that's what you're doing when you're putting that information in your profile.

STAHL: The real trouble started when they began using a tracking program called "beacon" that monitors what you buy on over 40 web sites and automatically reports it to your friends, without explicit permission. People signed up for Facebook thinking that it was a way to just stay in touch wh their friends. And now some of them feel that there's some snooping going on. Is there any concern you're turning Facebook into something much more commercial?

ZUCKERBERG: I actually think that this makes it less commercial. I mean, what would you rather see, a banner ad from bloomingdale's or that one of your friends bought a scarf?

STAHL: But when a Facebook user bought his wife a diamond ring online, the surprise was ruined because Beacon notified all his friends and his wife about it on Facebook. With stories like that, criticism of beacon began to build. But Zuckerberg dug in his heels, until he had a full blown P.R. disaster on his hands, including petitions and bloggers writing obituaries. I guess this shows how difficult it is for a company like yours to make money through advertising and protect people's real privacy and their sense of privacy.

ZUCKERBERG: It might take some work for us to get this exactly right. This is something we think is going to be a really good thing.

STAHL: Not a real answer to the privacy question, more like the canned response of a typical business executive.

ZUCKERBERG: I mean, there have to be ads either way, because we have to make money. I mean, we have 400 employees and, you know, I mean, we have to support all that and make a profit.

STAHL: But three big advertisers threatened to pull out, and Zuckerberg was forced to relent. He agreed to amend Beacon, making it easier for users to turn it off. And he apologized. So, do you think that mark failed as a leader in the Beacon fiasco?

SWISHER: Absolutely. Yes, yes.

STAHL: What were his mistakes?

SWISHER: His mistake was doing it.

STAHL: Doing it?

SWISHER: Doing it, period. His mistake was not explaining it to people. His mistake was not backing off very quickly when it was clear that it was a problem. I just feel like you see some of these mistakes they're making very early on, and you worry where the judgment is.

STAHL: Is he a good C.E.O.?

SWISHER: I don't know. I think he's very young.

STAHL: But those around Zuckerberg say he is learning fast. He might still wear a hoodie and no socks, but he's becoming a suit, as he ponders whether to take his company public this year. This would be a good place to announce that.

ZUCKERBERG: I think what I can announce is that it is highly unlikely that we will go public in 2008. And when going public makes sense to do, we'll do that. And maybe that's two years out, maybe it's three years out.

STAHL: Do you think that your age is an asset or a liability?

ZUCKERBERG: There's probably a little bit of both, right? I mean, there are definitely elements of experience and stuff that someone who's my age wouldn't have but there are also things that I can do that other people wouldn't necessarily be able to.