Facebook Case Study . In order to understand the future issues that Facebook will encounter, it is important to have an understanding of where the company came from and how it has grown since its inception.

Authors Avatar by bdetwiler (student)

Contents

1. Assume a Role        

2. Review Key Case Data        

3. Critical Issue        

4. Measure        

5. Analyze        

6. Improve        

7. Control        

Bibliography        


1. Assume a Role

The analysis of this case study is from the perspective of Bret Taylor, Facebook’s Chief Technology Officer.

2. Review Key Case Data

In order to understand the future issues that Facebook will encounter, it is important to have an understanding of where the company came from and how it has grown since its inception.   Facebook was founded as a grassroots, innovative communication device in the Harvard University dorms.  Certainly nobody could have expected it would become such a ubiquitous and important product in our society today.  Highlighted below are the milestones which have shaped Facebook’s corporate identity.

Starting in February 2004, Facebook launched as an online social network to connect university students with their friends by letting users create personal profiles and upload photos.  Other than basic layout changes, the first important technological advancement was the implementation of the News Feed in September 2006.  Facebook compiled the recent activities of users’ friends and listed them in a timeline format on the user’s homepage.   This change highlighted what drew users to Facebook—an easy way to find out what your friends were doing.

Facebook’s first advertising initiative (Facebook Ads) began in the fall of 2007, which included Display Ads, Facebook Pages, Facebook Beacon, and Social Ads.   These services allowed advertisers to target their campaigns to specific users on the “basis of gender, age, geographic location, marital status, languages spoken, places of education, workplaces, and interests as stated on the user’s profile.”  Facebook generated revenue from the advertisements that were clicked most often by users and those advertisers who paid substantially more (in an auction-type process) to have their ads placed.  Facebook Pages and Social Ads were successful at generating revenue, but Facebook Beacon encountered problems due to users’ perceived invasion of privacy.

Facebook’s next step was to partner with third-party websites to increase user engagement.  Facebook for Websites was launched in 2008 and third-party websites could access the enormous volume of data stored by Facebook to attract users to their site by allowing users to login with their Facebook username and password.  There were many successes seen with this advancement including a 15-100% increase in Facebook-user engagement and third-party sites saw a 30-200% increase in registration on their sites, with two out of three new registrations resulting from Facebook for Websites integration.  Inevitably, Facebook for Websites came across problems with privacy controls due to the amount of data shared between Facebook and the third-party site.   Regardless, over 10,000 websites and applications incorporated some level of functionality by mid-2009.

Join now!

Another important technological development was the implementation of Facebook Platform, which enabled third-party developers to build applications, including games, on top of Facebook’s network.  These applications attracted 40% of users and accounted for 10% of Facebook’s total revenue, approximately $427,000,000.  The revenue came from a 30% commission charge on developers’ sales of virtual goods.   In conjunction with Platform, the company rolled out a pay-to-play system in May 2009.  Facebook Credits could be purchased and used as virtual currency for goods across Facebook applications.  Overall, Facebook Platform increased user engagement on the website and within six months of launching, applications ...

This is a preview of the whole essay