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Welcome To
Facebook and Business by: Presented
Shaswat Singh Vaishali Lunia Shridhar Bhattar Anuradha Acharya Aayush Agrawal
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INTRODUCTION TO FACEBOOK

Facebook is a social networking website that is operated and privately owned by Facebook, Inc. Facebook is a privately owned company headquartered in Palo Alto, California. According to Facebook's Press Room, the social networking site currently has over 90 million active users. A February 2009 Compete.com study has ranked Facebook as the most used social network by worldwide monthly active users.
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INTRODUCTION TO MARK ZUCKERBERG

Mark Elliot Zuckerberg (born May 14, 1984) is an American Computer programmer and internet intrepreneur. Facebook was founded by formerHarvard student Mark Zuckerberg (while at Harvard) Mark Zuckerberg was joined by two other fellow Harvard-students Dustin Moskovitz and Chris Hughes to help him grow the site to the next level As of 2011, his personal wealth was estimated to be $13.5billion.

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FACEBOOKS USERS AND REVENUE

As of April 2011, Facebook has over 2,000 employees, and offices in 15 countries

Year 2006 2007 2008 2009 2010

Revenu e $ 52 $ 150 $ 280 $ 775 $ 2000

Growth ---188 % 87 % 177 % 158 %

Date August

Total active users growth Users(mill.) Monthly


26,2008 100 200 178.33 % 13.33 % 10 % 6.99 % 4.52 % 2.54 %

April 8, 2009

September 15,2009 300 February 5, 2010 July 21,2010 July 6,2011 400 500 750

Most of Facebook'srevenue comes from advertising.


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How business can be promoted through Facebook


Today many companies use Facebook to promote their business.

Facebook has provided a number of tools that make it a powerful tool not just for individuals, but for businesses and brands as well.

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Ways facebook can help your business

Facebook Pages Groups

Poll Advertising
PNG File

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F:\How Advertising Works on Facebook.mp4

Advertising through Facebook

Tools for Advertisers

1. Beacon 2. 3. Polls 4. 5. Sponsored Facebook Groups 6. 7. Social Ads

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Why is Facebook chosen as an advertising and promotional platform?


1. Instant customer engagement. 2. Information immediacy and fast feedback

3 Low price

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F o :\H w A v r in W rk o F c b o .m 4 d e tis g o s n a e o k p

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Facebook - Strategy Analysis


(2004 - 2011)

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Table of Contents
Evolution - Social Networks Insights, Footprint Growth & Revenue Split Platforms & Emerging Networks Facebook vs Google vs Telco Threat to Telcos Horizontal Play Skype Acquisition Facebook Success vs Myspace Failure Enterprise Play

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Social Web
Perceptual Map

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Hi gh

Social Web

Wi lli ng ne ss Lo w Low Ability to Share Web

High

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Source: The Social Practice -

Social Networks
Evolution

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9 7 Si x Degrees.com

2000 MiGente Six Degree Closes

2002 Friendster, Skyblog

2004 Flickr, Piczo, Mixi, Facebook, Hyes, Orkut

2006 Windows Live, Twitter, Mychurch

9 9 Live Journal, Blackplanet

2001 Cyworld, Ryze

2003 Linkedin, Myspace, Last.fm, Hi5

2005 Youtube, Xanga, Bebo, Ning, Yahoo!360

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Source: HBR Facebook Platform

Social Networks
Perceptual Map

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Hi gh

Linkedin

Hi gh

Twitter

Linkedin Pr of es sio na l K no wl ed ge

Twitter

Facebook

Lo w Low Personal

Facebook High

Lo w Low Personal Updates High

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Facebook
Insights
Founded in 2004 2000 Employees Market Value - $60B to $70B 600 M users (3rd Largest Community access via Mobile 200 M users ) 29 visits/month/user 55 minutes/day 55% Female Users (US) Average Age 28.2 years 2nd Preferred way of sharing content

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Ownership Pie

Why Facebook Friends 63% Keep in Touch 59% Social Life 37% Guilty Pleasure 30%

Microsoft 1.6%

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Source: Wikipedia, Reface.me Who Owns Facebook, ExactTarget, Fans & Followers Report

Facebook
Virtual Place & Growth
Sina Weibo Badoo Bebo Orkut Vkontakte Gmail Twitter Habbo Windows Mgr Qzone Facebook Tencent QQ Skype 0 100 113 117 120 135 176.5 200 203 48 0 600 63 666 3 50 Active A/Cs (in Mill) 0 33 0 2500 Revenue (Mill) 2000 2000

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1500

1000

77 5 28 150 0

500 52 1000 0

2006 2007 2008 2009 2010

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Source: Wikipedia

Facebook
Revenue Split
Paid for Virtual Goods

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Brand Advertising Self Service Advertising Microsoft Advertising

Revenue is dominated by advertising & sponsorship (2009)

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Source: Stlpartners, Telco2.0 Facing up to Facebook

Facebook
Footprint

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Year

Wall Photos Likes Name Picture Gender Birthday Friends Post

Contact Networks Info

Other Email & Data Chat

2005 2011

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Legend

High

Medium

Low

Platforms
Social, Mobile, Search

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Facebook 622 M Users + 41% Y/Y 550 K Apps 500 M Downloads

iPhone/iPad/iTouch 130 M Users + 103% Y/Y 350 K Apps 10 B+ Downloads

Google 972 M Users + 8% Y/Y Paid Clicks +18 Y/Y

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Source: TOP MOBILE INTERNET TRENDS , KPCB, 2011

Platforms
APIs Billion Club 13 billion API calls / day (May 2011) 10 billion API calls / month (January 2011) Over 260 billion objects stored in S3 (January 2011) 1.6 billion API-delivered stories / month (October 2010) 5 billion API calls / day (April 2010) 5 billion API calls / day (October 2009) 8 billion API calls / month (Q3 2009) 3 billion API calls / month (March 2009)
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Source: Open APIs -State of the Market, 2011, Glue Conference

Emerging Networks
Information, Gaming, Commerce

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Twitter 253 M Users + 85% Y/Y

Zynga
(Farmville on FB)

130 M Active Users +15% Y/Y

Groupon 51 M subscribers + 25x Y/Y

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Source: TOP MOBILE INTERNET TRENDS , KPCB, 2011

Facebook
Commerce

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Image Source: http://www.socialmediaexaminer.com/facebookcredits/

Facebook
Commerce

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Image Source: F-commerce, Leveraging Facebook to develop Barry Sweeney,2011

Facebook
Users Communication Mode Generating Demand Avg Time Spent 7hrs 7 mins Users 600M Rev/User - $3.3 US Avg Price and CTR are low CTR 0.1%, CPM/CPT - $0.6

Google
Users - Transaction Mode Fulfilling Demand Avg Time Spent 1hr 16 mins Users 972M Rev/User - $30.2 US CTR 1.5%, CPM/CPT - $2.5

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Source: Nielsen monthly time spent November 2010, Telco2.0 Facing up to Facebook

Facebook
Threat to Telcos
Communities Relationships

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Te le ph on y

So cia l

Conversations Calls

Vo lu m e

Rendezvous

Telco Communications as core business service, largely synchronous Peer-to-Peer (P2P) communication Paid for by the end user Facebook Social Networking (communication) as a core business service, largely asynchronous group comm. Subsidised (free) to the end user and funded by advertisers 200 M users on Mobile

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Source: Google, Microsoft.com, Cisco.com, Telco2research.com, STL Partners

2 Sided Market
Overview
Value moves in both direction from Left to Right and Right to Left Marginal Revenue and Profit contribution is always increasing as user base grows, Network effect leads to infinite economies of scale (for information goods only) Revenue Revenue

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Co st

Custome rs

PLATFORM

Custome rs

Co st

Upstream

Value Chain

Downstream

News (Paper Based) 2 Sided Market Old Model


No economies of scale as this is not a digital good Advertise rs (Ads , Classifi eds)
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Creat e Conten t News) (


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Pric e Conten t News) (

Distribut ion

Customer s

Source: Strategies for 2 Sided Markets, Thomas Eisenmann, HBR

MySpace vs Facebook
Myspace Failure Old Media Model
Identified an opportunity with Myspace (Social Media), but couldnt leverage it Turned out to be a losing bet, in discussions to sell for $100M

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Reason Applied Old Media Model in a 2 a Sided Market Locked in Advertisers (via Google Search) on Upstream Side, and let the Customers Create Content (primarily blogs). Didnt let/opened Upstream Side to other Customers Networks effects on Downstream side are not leveraged on Upstream side leading deterioration in asset and momentum shifting towards other platform (Facebook) Revenue Upstream Co st
Only 1 Custom er (Advertis ers ) Conte nt

Downstream

MYSPACE Platform

Distribu tion

Custome rs (Subsidi sed )

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Source: Google, Strategies for 2 Sided Markets, Thomas Eisenmann, HBR

MySpace vs Facebook
Facebook Success New Media Model
Reason Applied New Media Model in a 2 a Sided Market Opened Platform for various Upstream Customers Hosted Content from various players, Ads, 3rd Party Application Developers Opened Platform for various Downstream Customers Market Research Companies Networks effects on Downstream side are leveraged on Upstream side built mass and momentum

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Revenue Upstream Co st
Vario us Custome rs Conte nt

Revenue Downstream

FACEBOOK Platform

Distribu tion

Custome rs Paid Data Resear ch

Co st

Revenue

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Source: Google, Strategies for 2 Sided Markets, Thomas Eisenmann, HBR

Competitive Growth
Internet Companies Information Goods

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No Diseconomies of Scale

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Enterprise Play
Social Stack - Top Down

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Social Networks (Facebook, Twitter, Foursquare, Linkedin)

Inf ras tru ct ur e

Monitoring & Analytics (Brand Monitoring, Insights) Se rvi ce s

Aggregation (Identity Brokers, Aggregators)

Publication (Apps, Management)

Social Platforms (Community, Collaboration, Blogging, Innovation, Social Commerce )

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Source: Altimeter Group, Business Stack

Impact
Facebook has more than 500+ million active users in July 2010, which is about one person for every fourteen in the world. More then 175 million people login to facebook everyday and more then 400,000 people join facebook everyday. The website has won awards such as placement into the "Top 100 Classic Websites" by PC Magazine in 2007, and winning the "People's Voice Award" from the Webby Awards in 2008 . A January 2009 Compete.com study ranked Facebook as the most used social network.

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CONT..
Facebook's effect on the American political system became clear in January 2008. Groups were made to allow users to give live feedback about the "back to back" January 5 Republican and Democratic debates. Facebook users took part in debate groups organized around specific topics, register to vote, and message questions. Over 1,000,000 people installed the Facebook application 'US politics' in order to take part, and the application measured users' responses to specific comments made by the debating candidates.

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CONT..

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In August 2010, one of North Korea's official government websites, Uriminzokkiri, joined Facebook. Australian cops use Facebook to curb stalker The Victoria Police have served an intervention order via Facebook on a man who "threatened, bullied and harassed" a former partner. Leading Senior Constable Walton then typed the court order and sent it as a message on the Facebook account the man had used to intimidate the woman. Walton also posted a video of himself reading out the order.
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BAD EFFECTS

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1.It can degrade school performance 2. It can get you fired 3. It is bad manners to not show up 4. It is unhealthy to stay up all night long 5. It is dangerous to show everything.

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People on Facebook
More than 750 million active users. 50% of our active users log on to Facebook in any given day. Average user has 130 friends. People spend over 700 billion minutes per month on Facebook

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Mobile
There are more than 250 million active users currently accessing Facebook through their mobile devices. People that use Facebook on their mobile devices are twice as active on Facebook than non-mobile users. There are more than 200 mobile operators in 60 countries working to deploy and promote Facebook mobile products

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Global Reach
More than 70 translations available on the site. About 70% of Facebook users are outside the United States . Over 300,000 users helped translate the site through the translations application

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Activity on Facebook
There are over 900 million objects that people interact with (pages, groups, events and community pages) Average user is connected to 80 community pages, groups and events. Average user creates 90 pieces of content each month. More than 30 billion pieces of content (web links, news stories, blog posts, notes, photo albums, etc.) shared each month.
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