The Future of Facebook
Ashley Nichols
THE FUTURE OF FACEBOOK
Ashley Nichols
10/5/2012 CGS2060 (web-based)
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The Future of Facebook
Ashley Nichols
The Future of Facebook
Ashley Nichols
10/5/2012 CGS 2060(web-based)
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The Future of Facebook
Ashley Nichols
Table of Contents Introduction .................................................................................................................................................. 3 Facebook After IPO ................................................................................................................................... 3 Facebook’s Future ................................................................................................................................. 5 Bibliography .................................................................................................................................................. 7
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The Future of Facebook
Ashley Nichols
Introduction
After a recent and very-public IPO (initial public offering) in May 2012, the social-media powerhouse Facebook has undergone several financial changes that have deviated from founder Mark Zuckerberg’s long term goals, leaving the nation asking, what’s next for Facebook? Mark Zuckerberg, Facebook founder.
Facebook started up in February 2004 in the dorm room of
Zuckerberg at Harvard. Although his company had a controversial conception, full of accusations and lawsuits, its growth has been exponential. It began as a social media site dedicated to connecting Harvard students and it quickly progressed into a site available to the entire world. It went from reaching a single campus to connecting over 1 billion users worldwide, as of September 2012 1 (Fowler). “Now, six years later, the site has become one of the biggest web sites in the world, visited by 400 million people a month” 2 (Carlson).
Facebook After IPO As Facebook expands, so does its need for money. Just like everything else in the world, money supplies a means to making ideas come to life, and Zuckerberg has quite a line-up for the future of Facebook. Facebook has generally stuck with classic advertisements to bring in their income, but that isn’t enough anymore. “What this IPO is really about is the company now has more money to go out and make more acquisitions and build more interesting products,” Meagan Marks said 3 (Copeland). For Zuckerberg, having to go outside the walls of the Facebook family of employees and make it public wasn’t originally in his plans. However, being a huge power company, like Facebook, can sometimes force it to go in a direction that benefits it in the short run, making it deviate from long term goals. In the case of Facebook, making the company public will hopefully provide that monetary necessity that will fund future projects and endeavors.
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Fowler, “Facebook: One Billion and Counting”, 2012 Carlson, “At Last—The Full Story of How Facebook Was Founded”, 2010 3 Copeland, “Facebook IPO Is Not the Endgame”, 2012 2
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The Future of Facebook
Ashley Nichols
“And once he [Zuckerberg] does take it public, he will face inevitable pressure from Wall Street. It will become considerably harder to maintain his resolute emphasis on his vision of sharing and on growth above short term revenue” 4 (Kirkpatrick). Making the decision to go public for any company is a risky game, but for Facebook is was the next obvious step. 70% of Facebook’s money comes from advertisements on their website page. In past year they even started selling things like pictures of cake so users could send their friends’ birthday wishes and selling game credits to allow users to buy more features. Although, for a while, these outlets posed as great money providers, the times have changed and advertisements alone are not providing enough for the Facebook’s goals. “Marketing cannot be about companies shoving advertising in people’s faces, not because it’s wrong, but because it doesn’t work anymore” 4 (Kirkpatrick). With a popularity that isn’t expected to die out anytime soon, Facebook has established itself as a company on the same level as Google or Apple; it has become a part of our daily lives and even our English language. “Pretty much everyone in the West knows what Facebook is, and essentially what it’s for, even if they don’t use it 5 (Arthur).” So, now that Facebook has the support of public stock investors, what do they really have planned for the future? Will whatever they have planned be affected since the original asking price of the stock, $38, has gone done to about $22? The answer is no their plans haven’t been affected, Facebook’s projects are still in motion.
Facebook stocks have had a rocky start.
“…We cycle quickly; we iterate so quickly, it hasn’t affected our operations or the innovation,” Sheryl Sandberg said 6(Demos). As Facebook continues to grow, so does its database of user information. What this means is that although Facebook allows users to have privacy settings, it doesn’t mean they can hide their information from everyone. Facebook uses information that users to post to narrow advertising down, so that companies can target specific people This vast database is more than just a way for companies to target their products at you; it is a compilation that Facebook is using for one of their next projects.
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Kirkpatrick, The Facebook Effect, 2010 Arthur, “Facebook IPO? Flat. Facebook Future? Bright., 2012 6 Demos, “Facebook’s Sandberg Want to Talk Future, Not IPO, 2012 5
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The Future of Facebook
Ashley Nichols Facebook’s Future
The Future of Facebook: search and mobile. Since Facebook has blown all other social-media sites out of the water, it has decided to enter the playing fields of search and mobile. They’ve been tweaking their mobile phone application to make it more advertiser-friendly. As mentioned before, 70% of Facebook’s income comes from, well before the IPO, advertisements and since the mobile phone industry is a constant in a majority of people’s daily lives, what better way to increase monetary income than to target it? “…The company is in the process of ‘retooling’ in order to offer new advertising products as it looks for new revenue streams-particularly in mobile” 7(O'Reilly). By adding the advertising feature to the ever popular and accessible Facebook app, it doesn’t just allow companies to advertise to their normal market, but it expands their horizons and will “allow the company to better tap the international markets” 8 (Sengupta). By allowing companies to advertise both on the physical website and the app, the more people at will reach and the more funding it will bring it. But, even bigger than this is Zuckerberg’s search project. He plans to manipulate the user database to enter in to the realm of search and to provide those users with information provided by their own friends. “…Facebook has a team working to improve the site’s current search facility to make it competitive with the likes of Google and Bing” 7 (O'Reilly). Google is a search engine that has been around since 1998; it competed against other engines such as Yahoo! and ask.com, and blew them out of the water with their revolutionary algorithm. Google has dominated the world of search and has become a trusted source. Facebook has already conquered the world of social media, by a landslide, and now they plan to take over search, but with a twist. At a recent event in September 2012, Zuckerberg announced Facebook’s interest in search and explained it would be a “powerful version of question and answer sites” 9 (Sloan). In theory, Facebook would answer questions based on a user’s friends’ activities and suggestions, whereas Google finds reviews of random people; it would make a user’s experience in search more personalized than the traditional search engine.
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O’Reilly, “Facebook’s Future Is in Search and Mobile”, 2012 Sengupta, “Blurry Future for Facebook”, 2012 9 Sloan, “Mark Zuckerberg’s Search Ambitions Are Google-Sized”, 2012 8
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The Future of Facebook
Ashley Nichols
“It’s surreal, and IPO was never what we were working toward. This IPO is not a lifetime moment for me – when we launched News Feed and the Facebook Platform, those were major lifetime moments,” said Marks 10 (Copeland). With the rising and falling of stocks since the IPO release in May, and the introduction to the Fluctuation of Facebook Stock May $38
new app, Facebook has quite a bright future ahead. Being led by a single leader, instead of corporately owned like MySpace, Facebook is being held to its original standards of creating great
June $27.72 July $31.73 August $21.09 September $19.31 October $21.35
products that are accessible and ethical. Zuckerberg has been temporarily derailed from his long term goals, but it seems that things are getting back on track and that Facebook is moving full steam ahead. In just a few short months Facebook has received about $16 billion dollars from stocks, giving them a good dowry to start on their next project: search.
Word Count: 1,185
I certify that I started this assignment as a new blank document, and the work herein is all my own. I understand that if it is discovered that I copied another student’s work, or made my work available to another student (knowingly or unknowingly), I will be charged with cheating and subject to the consequences as put forth in the class syllabus. -Ashley Nichols
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Copeland, “Facebook IPO Is Not the Endgame”, 2012
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The Future of Facebook
Ashley Nichols
Bibliography Arthur, Charles. The Christian Science Monitor. 19 May 2012. Online Article. 21 September 2012. <http://www.csmonitor.com/Business/new-economy/2012/0519/Facebook-IPO-Flat.-Facebookfuture-Bright>. Carlson, Nicholas. Business Insider. 5 March 2010. Online Article. 1 October 2012. <http://www.businessinsider.com/how-facebook-was-founded-2010-3>. Copeland, Michael V. WIRED. 18 May 2012. Online Article. 21 September 2012. <http://www.wired.com/business/2012/05/facebook-ipo-is-not-the-endgame/>. Demos, Telis. The Wall Street Journal. 3 October 2012. Online Article. 3 October 2012. <http://blogs.wsj.com/deals/2012/10/03/facebooks-sandberg-wants-to-talk-future-not-ipo/>. Fowler, Geoffrey A. The Wall Street Journal. 4 October 2012. Online Article. 4 October 2012. <http://online.wsj.com/article/SB10000872396390443635404578036164027386112.html>. Kirkpatrick, David. The Facebook Effect. New York: Simon & Schuster, 2010. Book. O'Reilly, Lara. MarketingWeek. 12 September 2012. Online Article. 25 September 2012. <http://www.marketingweek.co.uk/news/facebooks-future-is-in-search-andmobile/4003766.article>. Sengupta, Somini. New York Times. 3 September 2012. Online Article. 25 September 2012. <http://query.nytimes.com/gst/fullpage.html?res=9C06EFDA103CF930A3575AC0A9649D8B63& ref=sominisengupta>. Sloan, Paul. c|net. 4 October 2012. Online Article. 4 October 2012. <http://news.cnet.com/83011023_3-57526009-93/mark-zuckerbergs-search-ambitions-are-google-sized/>.
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