Thur+Strategy+Report

Thur C.

TO: Proximity social networking team FROM: Christina Thur DATE: February 22, 2010 SUBJECT: Facebook strategy analysis

Below you will find my strategy report on Facebook for the Proximity social networking team. Facebook continues to dominate the social networking market. However, many analysts think consumer power jeopardizes Facebook’s future success . This is due to competition in the form of other social networking sites available on the web.


 * Profile **

Facebook is a  social networking   website operated and privately owned by Facebook, Inc. Mark Zuckerberg  founded Facebook while he was a student at   Harvard University. The website's membership was initially limited by the founders to Harvard students, but it later expanded further to include (potentially) any university student, then high school students, and, finally, to anyone aged 13 and over. The website currently has more than 400 million active users worldwide (Wikipedia, 2010.)

Facebook generates revenue from two services: Facebook’s estimated annual sales total about $300 million. Microsoft bought a 1.6% stake for $240 million last October, which led many to suggest the company is worth $15 billion (Bertoni and Gell, 2008).
 * advertisers who use data collected by Facebook to place ads and measure their effectiveness
 * features such as gifts that are purchased via credit card and sent to friends to be placed on their profile page

**Competitive landscape**

The social networking competitive landscape is dominated by two forces: The popularity of Facebook has much to do with its streamlined design, making it user friendly thus more accessible to a wider range of users. However, MySpace appeals to an audience that is more technically advanced as a significant difference between MySpace and Facebook is the level of customization: "MySpace allows users to decorate their profiles using  HTML   and   Cascading Style Sheets   (CSS), while Facebook only allows   plain text   ” (Wikipedia, 2010). Facebook’s strategy **
 * rivalry between MySpace and other social networking sites available for free on the web
 * user's ability to easily switch sites - e.g. when consumers left MySpace to pursue social networking on Facebook

According to Siteanalytics.com, Facebook is the leading social networking site on the web with 134 million visitors in the month of January alone, while Myspace, its biggest competitor, had only 51 million.

Facebook has a number of features with which users may interact (Wikipedia, 2010): Users can also add friends, send messages, and update their personal profiles to notify friends about themselves. Additionally, users can join networks organized by city, workplace, and school/college (Eldon, 2008). Facebook also includes easy-to-use features allowing users to find people that are not already accepted as Facebook “friends”, making it a great tool to follow up with new acquaintances.
 * the [|Wall], a space on every user's profile page that allows friends to post messages for the user to see
 * [|Pokes], which allows users to send a virtual "poke" to each other (a notification then tells a user that they have been poked)
 * [|Photos], where users can upload albums and photos
 * [|Status], which al lows users to inform their friends of their whereabouts and actions

**Generation-Y implications**

Given the ever evolving state of internet social networking and the multitude of options (Myspace, Twitter, Google Buzz), will Generation-Y continue to rely primarily on Facebook for social networking?

I believe Generation-Y will continue to use Facebook considering it is the most accessed social networking site by a substantial margin. However, Facebook needs to remain competitive by continuing to add new features that rival other social networking site’s most popular aspects. As new social networking sites become available, Facebook should develop new features with functions similar to the competition.

** References **

Bertoni, Steve and Gell, Erin. (September 17, 2008). Want To Marry A Billionaire? Retrieved February 22, 2010 from []

** Compete. Retrieved February 22, 2010 from [] **
Eldon, Eric. (December 18, 2008). 2008 growth puts Facebook in better position to make money. Retrieved February 22, 2010 from http://venturebeat.com/2008/12/18/2008-growth-puts-facebook- in-better-position-to-make-money/trackback Forbes. Retrieved February 22, 2010 from [|www.forbes.com/2008/09/16/billionaire-bachelors-single-lists-]

Wikpedia. (22 February 2010). Facebook. Retrieved February 22, 2010 from []