V) Facebook (Started In 2004)

. 2 b. members (including 50% of all Americans); with the number of active mobile users is 1.3+ b ; in August 2015, 1 b. people used Facebook in one day; with 1 in 7 of the world's population using Facebook to connect with other people

. 4m.+ businesses use it

. 750m.+ visit it every day (10 times what its predecessor MySpace had at its peak)

. 75% of visits from mobile phones

. Members spend up to ? hour each session

. Around 1/3 of members visiting multiple sites daily

. 10m.+ new photos every hour

. People press a "like" button around 3b. times daily (eg 34 m "like" Coke-Cola)

. Most members have 130+ direct contacts

Instragram (part of Facebook) has 800m. customers

Growth has slowed in western economies especially amongst the young adult demographics, eg in USA, 6.5 m+ of 13 to 25 years old have left in the last 2 years, preferring Apps.

In Feb 2014, buys WhatsApp (US$ 16 b+), a text-messaging service, to protect its turf. WhatsApp has 800 m. users (fastest growing membership of any social network by a factor of 2). Potential to send 7t messages annually

Fastest increase in users is

- over 50s age group

- Asia (73% in 2 years)

- Latin America, Middle East & Africa (69% in 2 years)

The USA has 16% of Facebook's user base; it provides around 50% of the firm's revenue

. Facebook aims to provide affordable Internet access to 2/3 of the world that are unconnected


"...it's the default way to communicate with friends across the world ... a popular marketing mechanism both small and large companies, and a rallying cry and economies..."

James Hutchinson, 2014

Rapid growth in mobile devices is shown by Facebook where 85% of its users use a mobile (2014). This suggests the end of the era of desktop online advertising.
Facebook has collected and analysed a huge amount of information about individual's tastes, beliefs, interests, photos and conversation from a very wide section of the community that is worth a lot to businesses and advertisers. Thus its focus has switched from user benefits to advertising benefits, ie Facebook is changing from a company centred around Facebook.com to a portfolio of apps and digital products.

In addition to buying organisations like

- Instagram (online photo & video service)

- WhatsApp ( Mobile messaging service)

- Oculus (virtual reality), etc.,

It is developing new app-like products in their research division (Creative Labs) like Slingshot (a look-alike Snapchat - see below), Paper (a social media newspaper which curates articles and photos into categories users choose), etc. Its in-house development is having limited success

Other activities include

- developing Facebook Marketplace which is expected to be many times bigger than Ebay

- developing Facebook Live (live streaming)

- developing Facebook advertising

- purchased Masquerade (similar to SnapChat)

- established Facebook groups as a great way to network, collaborate, follow trends, etc

Facebook is endeavouring to modify its business model to handle concerns about data privacy and content moderation, ie

"...it is hiring thousands of people to work on investigating issues with fake news and foreign interference in national elections..."

Sarah Frier 2018

Additionally, Facebook is facing some other concerns, ie

- its main social network, the basis for its success, simply cannot grow much more, eg

"...Facebook's winning strategy has centred on advertising in its news feeds. People came to social  network, scroll through, and see the ads between their friends' baby photos and news links. Whenever Facebook needed to make more money, it just dialled up the frequency of ads, or aggressively courted more and more people around the world to sign up to Facebook. But there are now 2.23 billion people using Facebook. That's two thirds of the world Internet-connected population. That's about the same size as Christianity. Who else can the company sign up......Too many ads, and people will turn away. The only place Facebook can replicate its tried and true business model is its photo sharing application Instagram..."

Sarah Frier 2018

- its other businesses are less certain, like ads in chat applications, virtual reality, television-like video content and social media updates that disappear. These businesses will probably result in lower margins, ie the margins are expected to fall from 40+ percent to somewhere in the 30s.

Some stats (2017)

- quarterly revenue ($US 7 b.)

- demographic coverage (50% of people on the net access Facebook)

- 2 b. monthly active Facebook users

- own in Instagram (400 m active monthly users

- established Facebook Stories that now has 1 b. daily users

- Facebook Video becoming more popular than Youtube

(source: Business Seminar Australian, 2017a)

Facebook is looking to pps as to win back teenagers who have turned away from Facebook in large numbers owing to their parents' presence and the perception that Facebook is no longer cool.

Snapchat (photo messaging app where messages disappear after 10 seconds); in 2014, Facebook unsuccessfully bid US$ 3 billion for it.

Some Challenges to Facebook

- spreading  disinformation, like 2016 US Presidential election with Russian interference

- fermenting genocide, like rape and murder in Myanmar

- mis-use of private data, like Cambridge Analytica working on Donald Trump's presidential campaign using private data collected by Facebook

- discrediting people in the most odious ways, eg demonising George Soros by the anti-Semitic right


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