Facebook had amassed just over one billion users worldwide and regarded as one of the most rapidly expanding sites in history. Aside from the social buzz, Facebook in a business aspect has been unsteady recently. Alongside a disappointing initial public offering in May, investors value the company as “just a fraction of the $100-billion opportunity”(Lynley) they had previously foreseen. As a free service for consumers, Facebook generates the majority of it’s revenue through advertising. The Facebook mobile application lacks opportunity for advertising due to the current design and functionality, resulted in a mere $72.7 million in revenue far less rival counterpart Google. Also, the next billion potential users may be difficult to reach with a majority of Internet users are situated in countries like China, where Facebook is prohibited. With all these factors in consideration, has Facebook finally began its descent?
With competition like Google Circles and Twitter, the continual need for innovation while creating avenues of revenue from an essentially “free” service is the main priority for Facebook. The need to allocate more resources into developing a innovative mobile advertising approach such as having a sponsored advertisement pop up in news feed every certain number of posts would be a viable option. Negotiations with governments in countries where Facebook is prohibited must be done to enter in this untapped market. Though, this may mean limited services for consumers in these countries, Facebook would still generate a buzz in a foreign market. The continual push for expansion and a revamping mobile advertising scheme will keep Facebook afloat for years to come if executed properly. Otherwise, the company could be part of history.
Works Cited :
“Facebook Makes its First Billion” Geoffrey A. Fowler. Globe and Mail. Friday, October 5, 2012.
Facebook Logo. Digital image. Durham University Shorinji. N.p., n.d. Web. <http://fuinabola.blogspot.ca/2012/09/facebook-logo.html>.