Ahmed+Strategy+Report

Ahmed N. To: Proximity Social Networking team From: Nawaz Ahmed Date: Feb26, 2010 Subject: Facebook strategy analysis

Here is my Facebook strategy analysis for the proximity social networking team. Although Facebook is used heavily in the social networking market, many analysts think competitions from other social networking sites jeopardize Facebook future success. Whether Gen-Y users will adopt it as their primary social networking sites, however, depends on whether Facebook provide them with the best features. Profile ** Facebook is a social utility that helps people communicate more efficiently with their friends, families and co-workers. This  social networking site is operated and privately owned by Facebook, Inc (Wikipedia, 2010). The site was launched in 2004 by undergraduates at Harvard, led by Mark Zuckerberg and his college roommates. Facebook has made a deal with Microsoft to promote itself. Some of its investors include Paypal co-founder Peter Thiel and Accel Partners (Google, 2010).

Facebook currently has over 400 million active users worldwide and generated approximated $350 million in revenue in 2008. Mark Zuckerberg, the CEO of Facebook announced that company's revenue to be in excess of $500 million in 2009 (newscnet, 2010). Most of its revenue earned by promoting ads and features. Competition Landscape ** The social networking competitive landscape is dominated by two forces: Ø The face to face rivalry between MySpace and Friendster. Ø The user’s ability to easily switch sites- e.g. when consumers left MySpace to pursue another networking sites. Facebook’s strategy **- The mission of Facebook and MySpace is to give people the power to share and make the world more open and connected. Theses social networks provide thier consumer with similar strategies to interact with each other. Both MySpace and Facebook offer users the opportunity to create and join groups on the site. Both of them are using music apps to get people's attention. They both are using mobile applications so that even if you are away from your computer, you can easily access to them through the phone. Despite the fact that Facebook has plenty of applications, it lacks the creativity compare to MySpace. Creativity is the most important tools through which MySpace attracts most of its consumers. Most of consumers adopt MySpace so they can have the type of design they want for their profiles (Vercillo, 2008)  Facebook also needs to add more features in order to attract more users it recently announced.This will give them a "strategic relationship to offer PayPal in key parts" of Facebook's advertising and developer systems (Facebook, 2010). PayPal will become a payment option for Facebook credits, which is currently being tested in a small number of games and applications. Facebook users, as well as advertisers and developers, will have a fast and easy way to receive and send payment (Owyang, 2010).

 Facebook remains ahead of MySpace because of its features and new strategy it provides to its users. The strategy yields vital implications to Gen-Y. PayPal payment option could help to gain people's attention because a lot of people shop online monthly. Facebook Credits represent the tip of a much larger iceberg in terms of user engagement and activity within Facebook, and perhaps even across the social web. Credits could become a medium of user interaction which transcends simple pay-for-service transactions by encouraging a new social financial framework (Owyang, 2010). In my opinion, Gen-Y should partner with Facebook because of its increasing revenue and growing number of users. References: **
 * Gen-Y Implication**

 Facebook. (2010, 25 February). Press. Retrieved February 27, 2010 from [|http://www.facebook.com/facebook?ref=pf#!/facebook?v=app_7146470109&ref=pf] Google. Facebook, Inc. (2010February 26). Retrieved February 27, 2010 from [] McCarthy, Caroline. Andreessen: Facebook revenue to top $500 million in '09. (2009, July 6). Retrieved February 27, 2010 from [] Owyang, Jeremiah. Archive for the ‘Facebook strategy’ category. (2010, January 18). Retrieved February27, 2010 from [] Vercillo, Kathryn. MySpace vs. Facebook. (2008, February 27). Retrieved February 27, 2010 from [] Wikipedia. (2010, 25 February). Facebook. Retrieved February 27, 2010 from []