Essay Sample on Facebook's Financial

Introduction

This work presents the strategic decisions purposed to improve the financial and operating efficacy of Facebook Company Ltd. The corporate under evaluation is Facebook Company, a social media platform that offers its users the room to interact, connect, and, share information among family, friends, and, followers among others. The main purpose of this research is to formulate strategic decisions whose role would be to improve the organization's financial, operating, and, investing efficiency pointers. The aim of the study is to evaluate the projections of the firm's future establishment and development utilizing financial statement analysis techniques, competitive environment valuation tools, risk analysis and as to approximate the organization's present and past efficiency pointer, determine the shortcomings and strengths of the Facebook from the perception of financial management and offer recommendation concerning ways of enhancing the company's financials.The company has obligated itself to offer users the ability to connect and make the universe a small village where it is linked by developing meaningful and participation merchandise that helps users to bond and have real-time experience electronic devices majorly computers and smartphones. Furthermore, the organization helps people find out what is taking place in their surroundings so that they can share information, photos, opinions, and other activities with an audience starting from their friends to the community, and stay linked universally by retrieving Facebook's products, comprising of Facebook.

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Technology

The product development is dependent on constant improvement in generating and refining its products for social interaction. As user engagement increases, Facebook ought to make noteworthy reserves in technology to improve its prevailing goods and services for users, venders, and, inventors. Similarly, Facebook has endowed in long-term enterprises such as connectivity efforts, synthetic intelligence study, and, computer-generated reality.

The most of Facebook's salespersons utilizes the company's self-service as a podium to formulate Facebook pages and to introduce and control their presenting efforts. Besides, Facebook has an international relations force that concentrates on enticing and holding dealers and offering to back to them during the phases of the publicizing operation sequence from pre-purchase, to deciding actual maximizing to post-campaign analytics. The firm works straight with salespersons, through customary marketing agencies, and with a network of focused agencies and partners. The company presently operates five care offices and more than 35 auctions headquarters globally. Moreover, Facebook capitalizes in and depend on self-service apparatuses to offer direct client support to its users and associates. Facebook own and contract data centers in different places all over America and private a data center facility in Sweden.

Marketing

Currently, Facebook groups have developed progressively with its clients engaging their friends to attach with them, buoyed by subjective determinations to inspire responsiveness and interest. Besides, Facebook has capitalized and will continue to capitalize on publicizing their products and services to strengthen the brand, develop their user base, and upsurge commitment around the domain (Leung, Bai & Stahura, 2015). Facebook control over l the usefulness of its products and social dissemination networks as its operational marketing technique.

Intellectual Property

To develop and safeguard the company's proprietary rights, the firm depends on a grouping of copyrights, clear applications, brands, copyrights, trade secrets, comprising of expertise, license contracts, concealment procedures, and, privacy contracts with external bodies worker disclosure, and discovery duty contracts, and, other pledged rights. Further, to guard the company's proprietary rights, continuously Facebook has bought copyrights and manifest applications from third parties (Aydin, 2016). The firm does not concur that their patented equipment is reliant on any copyright or sets of linked to charters or exclusive rights. Therefore, the firm thinks the time of the copyrights is satisfactory relation to the likely subsists of its services.

Facebook

Facebook is a website that began in February 2004 at Harvard and was programmed by Mark Zuckerberg. One thousand two hundred people from Harvard University joined "The Face book," within 24 hours (Leung, Bai & Stahura, 2015). In the beginning, only affiliates of didactic organizations around America signed up for the profile on the site. However, in 2006, this policy changed thus allowing anyone with an email address to join the site. The company achieved 30 million profiles in the year 2007, and since then, the number has grown tremendously. Hence, Facebook has developed to a fundamental platform of civilization globally.

Facebook is a social media platform, connecting people, family, and, friends. The user stays connected and knows what is happening in their surroundings, unlike in the 21st century. In spite of discovering the social website, other forms of communication were not done away with, meaning the social site is not only used by the young generation, who have been exposed to the internet as they grew, but it is also used by middle-aged and the elderly (Xia et al. 2016). Thus, the use of the website became widespread, turning the initial social networking site into a business platform.

Facebook is both a social network and a unique business type. The main aim of a social network is to unite people and not to sell any product. "Facebook's operation is to provide people the authority to share and make the universe more open and linked." Providing connection is the primary aim of a company to its clients. Users are not charged for this service, but instead, the firm sells publicizing space to other enterprises. This is how Facebook earns its revenue. This is because the company has spent time and resources to discover ways to monetize its users. It has done well, hence securing itself a position on the publicly operated markets. On May 18, 2012, Facebook developed its Initial Public Offering (IPO). After more than eight years of existence, Facebook became a public company. However, Facebook did not have a great IPO because no one had a tangible notion as to the worth of the company to the stakeholders, which is still a problem to date. The company has no comparable, since it's unique and first of its kind. Other companies that look similar are Google and LinkedIn.

Another reason is Facebook has not found ways to monetize their base, despite the company's massive user base. Investors have tabled concern that the firm is not making adequate money off the users hence, the urge to find more and better ways to monetize its support for the future. If not, the company may never solve its problems. This factor makes investors doubt the firm. Lastly, the firm has a competitive advantage over others now, which may fade with time. Investors feel that Facebook may lack a sustainable position in its edge over other companies.

This paper aims at offering a better impression of the actual value of Facebook to stakeholders by analyzing whether Facebook has a good stock, investigating the Initial Public Offering to see if ideas can be gathered from a deeper scrutiny and to discuss the ad income model of Facebook and its ability to survive as a business strategy. Finally, there will be financial analysis to look at the most recent values and try to put various values on the market price of the Facebook stock.

Initial Public Offering

When first a firm allows for the purchase of a section of ownership in that company in exchange for money that is when the Initial Public Offering occurs. After an IPO, the stock of the company can be sold in public since it is public property. The most popular type of stock knew as a joint stock that guarantees a right to obtain dividends paid out and have the capability. To settle on decisions encountered by investors. It is a significant phase for firms to shift from being private to public entities with benefits and drawbacks. The shares given to public neutralize the private ownership of the firm. As a result, it brings various requirements of that organization, for instance, when a company shift to a public entity has to adhere to the Sarbanes-Oxley Act. The Securities and Exchange Commission usually needs a financial report. In other word, firms have to take huge measures when seeking to be public property. Companies under Initial Public Offerings access several advantages over private companies since public companies can obtain funds which private firms to do not have such privileges.

According to Richard Kleinburg's book Initial Public Offerings, he claims that are two ways of raising capital for a firm. The first approach is through debt and the second one is through equity or establishing ownership in the firm. An IPO enables a firm to raise capital is a more natural way when using equity approach through an open market than soliciting investments from third parties. Stakeholders value liquidity and a determined price. The purest form of exchanging assets is through cash. Stock markets such as New York Stock Exchange and the NASDAQ gives defined costs and high liquidity. Stakeholders are aware of the worth of their investment, and they can offload that investment for any reason. Those that choose to invest in private companies' lack hence, an investment on the open market is much appealing enables public organizations to raise the quantity of capital and elevate the worth of the firm. Facebook indeed advanced its value by taking advantage of the excitement surrounding the firm (Wasiuzzaman, Yong, Sundarasen, & Othman, 2018). The Initial Public Offering of Facebook, in the first few months of 2012, becomes the trendiest subject. Everyone one was interested in following up how the social media giant would perform on the stock market. Majority predicted failure for the company, while minority claimed it would be a gold mine, many stakeholders started to show interest on investing with Facebook, which had secured a market edge for itself. Similarly, the higher the focus on an IPO, the greater the valuation awarded to the organization. A higher estimate implies that more capital per share which will be heightened by the IPO.

The book by the title: The 12 Secrets of Investing in IPOs by Linda Killian, Kathleen, and William Smith offers a keen understanding of how IPOs should be handled as an investment. Those writers have developed an investment business around the purchasing and selling of IPOs. They recommend ten aspects with which to evaluate companies that are going public to determine the prosperity of a company after its shift to being a public entity. This model will be utilized to analyze Facebook before the IPO. It should be noted that all these details used in this framework came from prior the IPO went public to offer a better idea of stakeholders thinking before the firm went viral the first prosperity that securing IPOs address a vital marketing chance. The innovation that Facebook provides is profound. It enhances is profound. It has reinforced the communication and attachment of individuals around the universe. Individuals can share not only written but also visual experiences with anyone they need to. Facebook has modified the way individuals stay connected. One who looks at the massive development which Facebook ends up content. The problem that Facebook like other social media platforms faces too is that it does not place into consideration commercially significant needs. This has not come to the realization yet, but Facebook has a vast number of...