FACEBOOK IN 2011

1. Why did Facebook grow so fast initially compared to other networks?

 Facebook grew from college to college.
 It used a dot-edu email address as verification of new user’s identity and college
affiliation.
 Facebook was designed to limit the availability of the user’s profile to only his friends
as well as other students at his school.
 This security measure ensured that the information of a user is only shared with people
he wants to share it with.
 Facebook allowed users to restrict who could access their profiles also.
 Even though the other networking sites also had similar restrictions, but it was not by
school as Facebook did.
2. Review the feature additions and scope changes (beyond college students) made by
Facebook over time. Why did these changes so often create a backlash among users?
Why did Facebook pursue such changes despite these reactions?
 In September 2005, Facebook started opening up membership to others outside of the
dot-edu network.
 In September 2006, Fb added features like News Feed and Mini Feed, which created
privacy issues.
 During the period of 2007-08, Fb launched a series of features which included social
bookmarking, m.facebook.com, virtual gifts, flyers pro, social ads, facebook chat,
people you may know, facebook connect, mini feed extension, facebook beta etc.
 With the addition of these features, Facebook had to face a lot of challenges from the
users.
 Firstly giving access to the users outside college networks raised a lot of privacy issues
from the side of students. Because students were afraid that the information provided
in the profiles will be used by the companies as well as the college management which
created a lot of issues.
 Apart from these addition of other features like news feed also created privacy issues,
as the news feed shared information uploaded by the users to other users freely, till then
the information could be seen by the people who visits the profile.
  Despite of these criticisms, facebook moved on with their innovations and
modifications as they were aware that without changes it was not possible to compete
with others.
 Also they provided the necessary precautions as well as modifications to the users to
make them aware that their information can be protected by using privacy options as
well as a range of user controls.
3. Evaluate Facebook’s “platform” strategy. How do you think this strategy will play
out, competitively, going forward?
 Fb developed a platform called F8 in May 2007 for developers to build applications
that could run within the site. F8 allowed third party developers to create applications
that users could then add to 6 standard facebook applications like photos, events,
birthdays, groups, gifts and marketplace.
 By June 40000 developers had launched more than 1500 new facebook applications.
 Facebook has turned out to be the largest social graph in the world. This will be very
successful in the future.
 Since the number of users of facebook is increasing at a very high rate every year,
Facebook had more information about people’s relationships as well as preferences as
any other business did.
 Facebook provided most reliable data as well, so for any developer who is looking in
to people’s data to develop applications can make use of Facebook at any time.
 So facebook invited developers to tap in to their social graph at the F8 conference.
 This allowed developers to build social apps without reconstructing any social graph.
As a result Facebook established itself as a platform were developers can design
applications under Facebook.
 This platform strategy generated a lot of investments to Facebook, as a large number of
developers started using Facebook to design new applications.
 By the end of 2007 Facebook platform had about 10000 facebook applications. By mid-
2009 facebook platform developers were about to generate $500 million revenue mostly
through the sale of virtual goods like poker chips in social games.
 This strategy is very helpful in future competitions since becoming a host to the
developers to design new applications will attract more companies for investments and
improve the advertising potential.
4. What are the major changes that had happened since 2011?
 Some of the major changes that happened to facebook since 2011 are,
 Applications – following the launch of the F8 platform, there were 550000 actively
used applications offered on the Fb platform.
 The popularity of the gaming apps shifted the demographic mix of the user base.
 Apart from gaming Fb platform also became successful for other businesses like news,
healthcare, finance, and commerce and shopping.
 Online marketing – facebook also increased its revenue by improving its online display
ads. As the user base of Facebook kept on growing, the companies started to invest in
facebook as a matter of online marketing.
 Unlike normal web ads, ads given in Facebook can be accompanied by a social
endorsement from a friend by using the Become a Fan button.
 The benefit of facebook as an advertising vehicle was the range of tools that facebook
made available to the users.
 Local advertisers could make use of the features introduced by Facebook like Places
which allowed users to share their locations and Deals which offered user discounts
based on location.
 Payment Processing via Facebook Credits - Facebook mandated the use of Credits to
process payments for using its apps. Facebook would assess a 30 percent fee on each
transaction. The theory behind Credits is that it is easier for a consumer to purchase a
large balance in virtual currency and make many small purchases using the virtual
currency.
5. Assume that someday Facebook loses to some other alternative in the future. Try to
come up with a losing scenario for Facebook.
 According to the new reports of 2018, Facebook already started losing its charm over
young users in America. For the first time the majority of US internet users between
the ages of 12 and 17 won’t use facebook once a month, eMarketer said.
 It added that, while 83 per cent of social network users aged 18-24 will use Facebook
in 2018, its share will fall to 81.5 per cent by 2021.
 eMarketer also expects the number of Facebook users aged 12-17 and 18-24 to decrease
by 5.6 per cent and 5.8 per cent, respectively.
 “Facebook may have been central to defining the social media category, and it still has
many uses. But younger consumers in particular are looking for something beyond
utility.
 “They want novelty and exclusivity too; the search for the latest buzz in social media
will continue to lead them away from Facebook.”
 eMarketer also expects the number of Facebook-nevers” – young people who don’t use
Facebook, and have never used Facebook – to increase.
 “Many teens already prioritize social networks such as Instagram and Snapchat over
Facebook, and that trend is bound to increase as ever-younger consumers join social
media.”
 Snapchat in particular could be set to gain from Facebook’s loss.
 Around 43 per cent of social media users will use Snapchat this year, which eMarketer
said is more than twice its penetration rate from three years ago.
 “Snapchat’s popularity with teens and young adults has grown significantly since the
platform first launched in 2011,” eMarketer said.
 “Snapchat has also introduced a range of interactive features that have appealed to teen
audiences, in turn driving up the user number.
 This is a logical consequence of the ‘ageing’ of Facebook as a proposition and a well-
known environment, and the inevitable emergence of newer social platforms offering
the buzz of new features and functions.