Facebook: A Profile of a Prolific Social Networking Site
stefanie is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
On Oct. 4, Facebook (NASDAQ: FB) reached its one billion user mark. That’s quite a milestone for the beleaguered company, which started just eight years ago as a Harvard project by Mark Zuckerberg. Nobody is going to ask what Facebook is again. Just like the Coca Cola, McDonalds and Microsoft brands are part of our daily life.
The meteoric rise of Facebook can be rationalized in the need for people to stay connected in an interactive way. Amidst the fun, humor, cuteness, seriousness, positivity or criticism in the updates, there remains the underlying curiosity of most people. What are the updates in our friends’ lives? What are the latest news and buzz? What are the trends in the different areas of our lives? Facebook has changed the way we connect with one another in the past few years.
Facebook has received a lot of flak with its recent dismal IPO. Employees of the company were expecting more from the performance of their stock. Who wouldn’t want to be instant millionaires? Facbook does not manufacture equipment but what it has is the “money factor”. As Mark Zuckeberg told in his interview in Bloomberg Businessweek (October 4, 2012), “But the bigger question is, what services can be built now that every company can assume that they can get access to knowing who everyone’s friends are.” This is where the potential for more money can come in.
What are the next items on Facebook’s list”
- The next billion users
- More mobile phone users
- Face-off with competitors
The future of Facebook is in developing countries like India. There are still a lot of segments in India’s population that hasn’t been tapped yet. According to Socialbakers, a social media analytics firm in London, India ranks behind the US and Brazil as having the most number of users. One thing that sets people in developing countries apart is the way they use social networking to connect. India is predicted to overtake the US by 2014 in terms of the number of active users.
In terms of the age group that participates in Facebook, it is a young crowd. The younger than 35 years of age group is the driving force behind the social media company. It could be that they are still actively socializing online in an informal way or they could have more time in their hands.
Mark Zuckerberg is also targeting the mobile phone users in the quest to have more Facebook sign-ups. Mobile phone penetration in developing countries in particular will still grow and this could be an opportunity for Facebook to tap the market. Mobile advertisers are also expected to come in strong for the company as it gives more attention to this segment
Facebook and Twitter might be at war with one another but they are also said to be cut-throat with those they do business with when it comes to their platform. This is shades of Microsoft’s reputation as an exterminator. Apple (NASDAQ: AAPL) also has the reputation as being obsessive in controlling its platform. Apple was just recently involved in a lawsuit with the Korean company, Samsung, over patent infringement. It won its case in the US and was awarded $1B.
Another face-off is Facebook venturing into the search engine queries aptly called social search. With Facebook’s 1B users inquiring daily about where there friends are dining or socializing, that is a big potential for the company. This is said to be at least one third of Google’s (NASDAQ: GOOG) 3B inquiries each day. Google has long been the standard for search engine inquiries and also manufactures smart phone devices.
For the skeptics, a shake-up in the industry will be good. For the Facebook doomsday mongers, who says the company will close on October 15, 2012? Facebook will continue to grow and emerge as the winning social media company.
Compare and Contrast
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