Social Network Service and Facebook
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1 . How does Facebook make money? What are the value drivers of its business? What is its comparative advantage relative to other social networking companies?
Advertising accounted for 98 per cent of Facebook’s revenues in 2009, 95 per cent in 2010 and 85 per cent in 2011. Facebook offered advertisers the opportunity to segment and target its users based on their demographic information, expressed interests and social connections.
Another part of the revenue was generated by its payments business, which came almost exclusively from the sale of virtual goods used in social games sold through the online gaming company, Zynga.
Facebook’s value driver is dependent on how well they adapt to their ever-growing pool of competitors. Twitter is rising up as the most powerful social networking company with more and more users joining every day. It is becoming a household name alongside Facebook, Myspace and
Linkedin, all three companies share a similar vision of the free flow of information. Facebook needs to keep its users happy by continuing to improve the website, while adding more applications in order to keep their users loyal and have easy accessibility to the network. Facebook currently has more then 500 million active users that have invested a lot of time and energy into building their friend and client networks. For some people, having these huge networks of users translates into money and marketing opportunities. Because of this, it would take a big problem for people to start dropping Facebook. Users can access Facebook on their Smartphone’s, i-pods, i-pads and other devices. Facebook has been adapting to all new technology to sustain its competitive advantage and be known as the top social networking website. Facebook’s customers expect privacy. They want to know that their profiles and private information are safe from hackers, stalkers, and others that are looking to exploit their personal data. It is important for Facebook to uphold its practice of
!
1 . How does Facebook make money? What are the value drivers of its business? What is its comparative advantage relative to other social networking companies?
Advertising accounted for 98 per cent of Facebook’s revenues in 2009, 95 per cent in 2010 and 85 per cent in 2011. Facebook offered advertisers the opportunity to segment and target its users based on their demographic information, expressed interests and social connections.
Another part of the revenue was generated by its payments business, which came almost exclusively from the sale of virtual goods used in social games sold through the online gaming company, Zynga.
Facebook’s value driver is dependent on how well they adapt to their ever-growing pool of competitors. Twitter is rising up as the most powerful social networking company with more and more users joining every day. It is becoming a household name alongside Facebook, Myspace and
Linkedin, all three companies share a similar vision of the free flow of information. Facebook needs to keep its users happy by continuing to improve the website, while adding more applications in order to keep their users loyal and have easy accessibility to the network. Facebook currently has more then 500 million active users that have invested a lot of time and energy into building their friend and client networks. For some people, having these huge networks of users translates into money and marketing opportunities. Because of this, it would take a big problem for people to start dropping Facebook. Users can access Facebook on their Smartphone’s, i-pods, i-pads and other devices. Facebook has been adapting to all new technology to sustain its competitive advantage and be known as the top social networking website. Facebook’s customers expect privacy. They want to know that their profiles and private information are safe from hackers, stalkers, and others that are looking to exploit their personal data. It is important for Facebook to uphold its practice of