Facebook Case Analysis Michael M Chevalier Kaplan University MT460: Management Policy and Strategy Instructor Diane August 29, 2010 Case analysis of Facebook Facebook (originally “The facebook”) is a social networking website launched in February 2004 by Mark Zuckerberg, then 23, while studying psychology at Harvard University. Membership was initially limited to students of Harvard College, but soon the social site was subsequently extended to other Boston universities, the Ivy League and eventually all US universities. It became Facebook. com in August 2005 after the site’s address was obtained for a relatively meager $200,000.
By the end of the following year it was also open to high schools. As of September 2006, Facebook was extended beyond educational associations to anybody with a registered email address. They have over 175 million active users worldwide currently and are growing every day. Review/Analysis of the Case Facebook is a way to meet friends and keep up on what they are doing. The friends that you can make on Facebook are just one of the many benefits. A member of Facebook can join groups to meet people, or browse the profiles and discover new friends. Another one of those added values includes diversity.
This means that although you are in the United States, you could develop an online friendship with someone in the U. K. or Japan. On the occasion you add a friend to your Facebook “friend list” you will log in to keep abreast of when they have added updates to their blog or new elements like adding photos and photo albums to their profile. Facebook’s has a “classmate” finder and also a co-worker search is excellent for finding friends as well. You are given the opportunity to make new friends, and learning is always a good thing, you might educate yourself about new ways of life or new languages.
Facebook revenues are primarily made from advertising. That is why there are banner ads on Facebook. Facebook has backers including PayPal co-founder Peter Thiel, Accel Partners, and Greylock Partners. In 2007, Microsoft thought it lucrative and invested $246 million for a 1. 6% share in the social site. Facebook is now worth as much as $33. 7 billion based on secondary market transactions (The secondary market is what people are talking about when they refer to the “stock market”. This includes the New York Stock Exchange (NYSE), Nasdaq and all major exchanges around the world. ).
Common stock in Facebook is trading as high as $76 a share before it files for an initial public offering. Facebook has more than 500 million active users at this time while 50% of active users log on to its site in any given day. Another statistic is that an average user has 130 friends. It’s staggering to note that members spend over 700 billion minutes per month on Facebook. Analysis of Findings Social networking sites function is to bring people together mutually in an online community of Internet patrons. The online community shares general interests in hobbies, events, schools, religion, or politics.
Once an individual is granted access to a social networking site they can begin to socialize. This socialization may embrace reading the profile pages of other members and possibly even contacting them. Facebook is the great equalizer in bringing people together; all you require is access to a PC, Mac or laptop that is connected to the Internet. “The facebook” started out as a simple programming endeavor by an aspiring Harvard student that allowed a campus to familiarize itself with one another then flourished into an ever increasing tool of communication spanning as far as the Internet access would allow.
Social networking is by no means a novel idea. Networking has been around as long as civilization has existed. The Internet has exponentially grown since the early 90’s bring more users with it as computers became more and more accessible to the community. It was at the vector of Internet accessibility, expanding practicability, and social adventure that produced what we know as Facebook today. Marketing has formed an alliance with the Facebook business enterprise, each relying on the other to bring profitability to both parties.
Established name brands like PayPal and Microsoft have bought into the Facebook fortune even prior to any IPO registered on the stock market. Coca-Cola is planning a big media campaign on Facebook and it appears that foreign investors want a piece of the action too. Recommendations Facebook has developed a brand that sets its appeal apart from other social networking sites. The number of members is virtually limitless. Defining itself further through innovation of social-centric functions will serve to enhance the practicality of Facebook, i. e.
Direct uploads of mobile phone camera images and text through a WAP connection to be posted in real-time events on a member’s profile. Membership security must be upheld in above all circumstances. Facebook users must be informed regularly about how to be proactive in securing their profiles. Simple security parameters easily set through predefined checkboxes, multiple choice scroll downs with click and save controls help to make the users confident and reassured about the process. Summary and Conclusions Sometimes it’s just dumb luck that transpires to greater things – Facebook one such evolvement.
A college sophomore who started locally now has the authority of billions of dollars because of his enlightened venture. However, power without savvy has brought other great endeavors down in short order. Remember the Internet bubble of the late Nineties? Operating a social networking site must be in constant motion, trying new ways to create value added communication applications. Marketing integration is a necessary marriage of practicality and business sustainability. Marketing must appeal to a broad range of social segmentations.
Facebook was once a college campus student only resource for networking, but now a greater encompassing mixture of members will either be stimulated by the ads or perhaps will be unaffected by a calling to buy a particular product. Facebook will have to do their statistical homework to maintain its profitability. Facebook is a “Sign of the Times” in the new millennium. The world has become a smaller place with the accessibility to the Internet. Social networking has no borders and those who are active in integrating tools that accommodate their sharing interests nd activities sometimes in “real time” are part of that technology in an empirical sense. FT. com / Media. (2010, August 29). Retrieved August 29 2010, website: http://www. ft. com/cms/s/0/054fc0ee-afa7-11df-b45b-00144feabdc0. html Sketchy Startup Promises Facebook Stock To Investors. (2010, August 29). Retrieved August 29 2010, from website: http://techcrunch. com/2010/08/24/sketchy-startup-promises-facebook-stock-to-investors/ What Is Social Networking?. (2010, August 29). Retrieved August 29 2010, from What is Social Networking? website: http://www. hatissocialnetworking. com/ Yadav, S. (2010, August 29). Facebook – The Complete Biography. Retrieved August 29 2010, from Mashable website: http://mashable. com/2006/08/25/facebook-profile/ Facebook. (2010, August 29). In Wikipedia, the free encyclopedia. Retrieved August 29 2010, from website: http://en. wikipedia. org/wiki/Facebook From Linda Roeder, Former About. Com Guide. (2010, August 29). Where Did Facebook Come From?. Retrieved August 29 2010, from The History of Facebook website: http://personalweb. about. com/od/makefriendsonfacebook/a/whatisfacebook_5. htm