Facebook Case Study

Introduction

In 2004 Harvard student Mark Zuckerberg developed the world's largest online social network, Facebook from a student directory concept. The original basic site was known as Facemash using the Harvard's students' records. Since its official launch, Facebook has become the widest and most popular social network connecting millions of users globally. The CEO's primary idea was to converge the global village on one platform where people share their experiences and other social interaction information within one crowd (Lim, 2007). By 2008 Facebook remained the top social network in the United States with one billion monthly active users. Facebook's revenue account for billions of US dollars generated from advertisement and corporate partnership yet, user access and active engagement in the platform network is free. This paper will examine Facebook's revenue model as an illustration of its continued success in revenue collection, also it will assess the technological management adopted in the innovation, as well as the market completion in social networking. Exploring the development success story of Facebook will help realize the strengths and weaknesses that have driven the Harvard student's idea on social networking to the modern age.

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The revenue model of Facebook Inc is based on the outsourcing display of advertisements where partnering corporation uses banners and flyer advertisements as well as user-friendly and self-custom advertisements (McGirt, 2007). Although end users access the Facebook platform for free they are offered with self-engineered features to make advertisements at considerable low cost. The Facebook company capitalizes of its network vastness to increase its revenue base. Again, the flyers and banners advertised by world leading corporations account for billions of dollars as revenue for Facebook. For instance on its launch in 2004 the company partnered with the world's leading wireless money transfer (PayPal) founder Peter Thiel fetching half a million US dollars from the agreement. Later in 2005 facebook received US$13 million from Accel partnership and US$ 25 million from Greylock conglomerate. Consequently, Facebook has grown its revenue through sponsorship groups that cost US$300,000 monthly for each sponsored group that makes advertisements on users News feeds with virtual and cheap gifts sold by partnering companies (Lawson, 2007). By December 2012 the success path of Facebook saw the world's leading investors' partnerships to form over fifteen billion annual revenue(Facebook Statistics, 2018). Although, the initial concept of Facebook development targeted teenagers and college students the latter market value shift made it increase its target coverage by offering user flexible and best consumer advertisers like Microsoft, Amazon, and Samsung among others fetching millions of revenue for the company. Facebook has since been able to develop a tactical advertisement that targets the untapped market by widening user-friendly filter based on independent user demography and previous search through innovative determination of client interests.

The technological innovation used to develop the Facebook network has seen it grow to billions of active users globally. During the infancy concept, Facebook initialized with multi-college interaction where the college email address helped learners within a satellite learning institution converged and interacted socially. Mark Zuckerberg visualized the business opportunity that opened doors to the business model and advertising practices. The technological design and core features of Facebook helps users to exchange photos and video centralized on the user's individualized profile. Active share and uploading of millions of photos and videos daily provide interactive engagement of the global village on important social events and trends. The simplicity of the Facebook design makes the platform user-friendly increasing accessibility and crowd coverage due to the user-friendly graphical interfaces and text navigation features. unfortunately, the technological innovation has breached many privacy modalities in the social networks where user information and profile lacked a privacy policy. In the growth and revision of the policies, the social network secured its user's competencies through increased privacy changes. Building and promoting the long-held trust Facebook claims to reserve the rights to retain content even after deletion as a measure of compliance to Federal Trade Commission regulations.

Consequently, Facebook as one of the leading social network platform in the world connecting billions of active users daily, in the recent age it has received stiff competition from other social network platforms like Whatsapp and Instagram leading to massive losses. In 2018 Facebook experienced a US$123.4 billion loss overnight due to the decrease in active uses. In recent days the social network is receiving negative publicity and depopulation for the world users. The disappointing revelation is attributed to continued stiff competition from other social network platforms offering replica services but with sophisticated innovation especially of the security breaches experienced in the past through Facebook (Dillet, 2018). Following the decrease in the active user's percentage count and the new account growth, Facebook is partnering with another social network platform to increase the coverage effects and better user experiences. The strategic partnership is giving the network an elaborate strategy to enhance continuous growth and harness the efforts of the community (Facebook Statistics, 2018).

Conclusion

Conclusively, Facebook has become the world's leading machine, platform, and crowd characteristics of a successful corporation that stocks no inventory and does not develop content. The platform has drawn the leading companies in the establishment of a global village in network marketing and advertisement. Through effective partnership Facebook's open architectural design allows web businesses to plug directly into their social network infrastructure. This offers a workable recommendation that as long as Facebook remains free to access service to its use, advertisers will always find a reason to partner with this leading application for social networking platform.

References

Dillet, Romain (Jul 26, 2018) Facebook officially loses $123 billion in value, Retrieved from https://techcrunch.com/2018/07/26/facebook-officially-loses-123-billion-in-value/

Facebook Statistics, (2018). Facebook, http://www.facebook.com/press/info.php?statistics Retrieved on 24th Aug 2018.

Lawson, S. (25 Oct 2007). Facebook, RIM Team to Bring Social Networking to BlackBerrys, CIO, Available at http://www.cio.com/article/148550/Facebook_RIM_Team_to_Bring_Social_Networking_to_BlackBerrys Retrieved on 24 Aug 2018.

Lim, C. W. (2007). Building An Innovative Organizational Culture, National University of Singapore.

McGirt, E. (19 Dec 2007). Hacker. Dropout. CEO, Fast Company, Available at http://www.fastcompany.com/magazine/115/open_features-hacker-dropout-ceo.html Retrieved on 24th Aug 2018.