Is Facebook Really Affecting Businesses? Part 1
Yasir is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
When did technology begin? No one has the answer to that. However, people know that technology is constantly changing and the world is adapting to these changes. New firms are coming up with more innovative ideas and creativity is at its peak. The internet is the key element of change in technology and has been the most affected factor so far. From search engine optimization to social networking, technology is affecting anything and everything that is on the internet.
The change brought the internet to mobile phones and the current change in technology eased up the internet use on mobile phones. First, Nokia (NYSE: NOK) used to work on GPRS. Now, Research In Motion's (NASDAQ: BBRY) Blackberry uses an unlimited internet service. Nokia is amongst the first companies to implement the GPRS technology in their mobile phones. Today, it is one of the largest mobile phone manufacturers in the world. Research In Motion, on the other hand, is known for its BlackBerry business smartphones. BlackBerry is one of the most selling smartphones in the world. This is how these changes come and affect us in the blink of the eye. From politics to business and to economies, technology changes how everything operates and brings about a more efficient and effective way to do things.
What is Facebook all about?
Facebook (NASDAQ: FB) is one of the biggest social networking sites on the internet used by millions of people in the entire world. It almost seems like an essential need for a lot of individuals out there. It is also one of the most typed links on the internet. Facebook and technology are co-related and have a direct relationship. Basically, technology was the element that brought Facebook in this world. Recently, the site has introduced a new news feed ticker as well as a new translation function. We can see that the site is including technological elements from outside, including the Bing powered translator, to stay pro-active to any potential changes in technology.
Statistics show that in 2010, there has been a 480% increase in internet users in less than 11 years. Social networking is one of the parts of the internet and Facebook is the most visited social site. In 2009, the site had around 50 million users which went to more than 350 million users by 2011. The reason is that more and more people are using the internet now and social networking has become something essential for most of these people. Communication is easier than ever with the use of technology. Facebook is one of those sites that is looking for ways to improve the service so that it cannot be matched by any other potential social networking site.
Orkut is a good example for this. The site failed to cope with the technology, and the result saw Facebook take over the entire social networking industry. Therefore, the site needs to adjust with frequent changes. The days when the most popular social networking site was just a site for posting on friends’ walls is long gone. Now, you can see a new Facebook. You can easily see the difference by comparing the Facebook, today with the Facebook that came out 6 years ago. The changes have been massive which led to a massive number of users. You can see advertisement options, brand pages, school and university pages/groups, promotional strategies and various other things on Facebook.
The main thing that needs to be understood is that Facebook is no longer just for simple one-to-one communication. It has gone away from that. Now, businesses can interact with their customers, schools can interact with students and artists can interact with their fans. Campaigns can be launched and support can be gathered on Facebook. These are a lot of changes that have been made in several years and clearly, technology is playing a vital part in this.
Let’s focus on the SWOT
One of the weaknesses is that the site makes a lot of constant changes and people cannot adapt these changes. Initially, there was the normal wall feature which was used to interact with other users. However, this simple feature changed and a new wall appeared with photo previews and other additional options. It took time for people to adjust with this but in the end, all of them did. The new timeline has been the most controversial feature up till now and not many people are in favor of it. Basically, the wall has disappeared and there is a timeline which displays an individual’s history. Timeline, as the name suggests, shows what the user has been up to at different times on Facebook. Another problem is that there are massive advertisements which distract the users. Even though a lot of users have complained about these advertisements, this is not something that Facebook will look into.
One of the strengths is that it is a free and easy way of communication. All social networking sites offer an easy way of communication and Facebook is still one of the best ways to communicate with someone due to the activeness of users. Secondly, the target audience is massive. Facebook is available for everyone. There are certain sites which are specially designed for teens and others for businesses; however, Facebook targets everyone including adults, businessmen, teens and even children.
One of the opportunities is that the site can be a path for business surveys. Businesses need opinions from people in order to improve and Facebook is the perfect platform. The traditional way is to go for interviews but using Facebook means a cheaper and yet more effective way of finding out the preferences about potential customers. Also, Facebook can start buying and selling services similar to eBay (NASDAQ: EBAY) and Amazon.com (NASDAQ: AMZN). eBay started out as an auction site in 1995 and is one of the biggest auction sites and online shopping sites in the world. Amazon, started in 1994, is a similar company and is one of the biggest online retail stores in the world. People on Facebook are doing it and with the massive technological improvements, Facebook can easily have its own store for selling goods and services. Apart from that, it can easily turn in to a global phone and address book. The number of people who are on Facebook is massive and not only do they have accounts, but they are active on the site. The wide audience can lead to Facebook becoming the ultimate world phone and address book.
Facebook also has several threats as well. One of these is competition as new social networking sites are setting up. It is already facing competition from Twitter and now Google Plus. Another potential threat might be boredom due to low quality applications. Application development on Facebook has been poor and the site needs to focus on creating high quality applications for users. Lastly and most importantly, there are privacy threats. This is probably the biggest threat as there have been problems before and people are still facing privacy issues. One of the major privacy problems is the photos being leaked of different individuals.
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yasirrfc has no positions in the stocks mentioned above. The Motley Fool owns shares of Amazon.com and Facebook. Motley Fool newsletter services recommend Amazon.com, eBay, Facebook, and Nokia. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.