Does Facebook Have a Strategy? FACEBOOK WAS FOUNDED in a dorm room at Harvard in

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Does Facebook Have a Strategy? FACEBOOK WAS FOUNDED in a dorm room at Harvard in 2004 by 19-year-old Mark Zuckerberg and three college pals. What began as a hobby to let college students socialize online is now the world's largest social networking site, with more than 1.1 billion users and over $5 billion in revenues (in 2012. As of summer 2013, Facebook is the most popular website globally, even more popular than Google. Zuckerberg sees online social networking as the "most powerful and transformative social change in recent history. and the biggest invention since Gutenberg's printing press. Indeed, it's made him the world's youngest billionaire Before Facebook became a global phenomenon it had to overcome the first-mover advantage held b Myspace. Launched in 2003, Myspace was an early leader in social networking. Its success attracted the attention of News Corp. and other media outlets News Corp. acquired Myspace for $580 million in 2005. As a subsidiary of a publicly owned company, Myspace's revenues and profitability became more pressing issues after the acquisition. Myspace's busi ness model shifted from accumulating more users to growing revenues and profits by focusing on a few ad-heavy markets such as the U.S., UK, Germany France, and Japan. Myspace was hit hard by the global economic downturn that began in 2008. A year later, it laid off 45 percent of its staff. Facebook, on the other hand, remained a private company until May 2012. Among other investors Microsoft purchased a $240 million equity stake in 2007, and a Russian investment group added $200 million in 2009. Facebook's managers had less pre sure to produce bottom-line results than did Myspace This allowed the company to pursue a different busi ness model: more users first, profits later. While Myspace concentrated on a few developed markets Facebook pursued a truly global strategy. More than 70 percent of its users are outside the United States In 2008, Facebook displaced Myspace as the most popular social networking site. Facebook's new chal lengers in the social media space include Google+ LinkedIn, Pinterest, and Twitter. Facebook's business model is based on three pillars: 1. News Feed. Launched in September 2006, this quickly became a core feature of Facebook. It at the heart of a user's homepage and pr vides regular updates of friends' posts, photos events, group memberships, and other subjects The priority of items displayed in the News Feed is based on a complex algorithm. 2. Timeline. This is an u pdated version of the profile pages and was launched in September 2011. It allows each user to paint a complete life story on his or her profile. Users can select what information is shared and with whom they share it 3. Graph Search. Zuckerberg calls the network of connections between people the "social graph Graph Search is an attempt to map the global social graph in the form of a massive database Introduced in January 2013, it is a search bar that hovers at the top of Facebook's web page, acting as a title for the content of that page and allowing a user to query the portion of the social graph that is connected to and filled in b the user. As Exhibit MC1.1 shows, in May 2012 Facebook ent public with an initial share price of $38, making the company worth more than $100 billion. Just a year later, in the summer of 2013, Facebook was valued at around $60 billion. In an interview, Mark Zuckerberg conceded, "The perf rmance of the stock has obvi ously been disappointing, Frank T. Rothaermel prepared this MiniCase from public sources. It is devel- ped for the purpose of class discussion. It is not intended to be used for any kind of endorsement, source of data, or depiction of efficient or inef ficient management. All opinions expressed, and all emors and omissions, are entirely the author's. Rothaermel, 2014.

Explanation / Answer

1) One of the major reasons is the development of technology. When Facebook came into existance the internet was booming and young generation was more aware of it. Its was more user friendly and people found it more exciting then myspace. The business model of facebook made people more social and socializing more easy. After this a simple advertising strategy of 'word of mouth' make great things happen. Myspace focused more on revenue and less on aquiring more users. This helped Facebook as they focused only on getting new users.

2) Yes, I do believe Facebook has a good strategy but they need to develope new strategy to retain the customers. People mind set change quickly. I do believe in the future that Facebook will loose users as more people get bored with same thing and many new competitors have arrived such as tweeter and linkedin have come into picture. therefore they need to change their strategy to accomidate the ever changing environment.

3) The biggest issue with facebook is it does have any new exciting innovation. I recently left facebook to get away from the drama and find it a waste of time. Facebook need to bring in something new which help users to find their interest, I believe this is the number 1 competitive challenge. There can be a job portal, dating, wedding, finding new friends, finding new places for dinning etc.

4)

1. Add a Job portal to help people find new opportunities.

2. keep updating the platform as it is getting boring and also remove the million fake accounts.

3. People should develope more network rather than the usual friendlist.

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