Mackenzie Wolter Case Study Analysis: Facebook 6/15/12 In only 7 years, Facebook has become one of the most well-known and browsed online social networking platforms in the world. At the time this case study was written, comScore Media Matrix ranked it the number seven most trafficked website, but more recently Facebook experienced a massive 55% increase in traffic in 2010. It is translated in more than 70 languages and though it doesn’t think of itself as a photo website, Facebook was the number one photosharing website on the Internet. The aim of the website is to make it easier to share information with friends and people around you. Its two core principles consist of the user’s control over personal information and the universal access to information that others want to share. Mark Zuckerberg created the first Facebook in his Harvard dorm room, making it available to every Harvard student on February 4, 2004. One month later, its access extended to Yale, Columbia and Stanford students, and by June, Facebook was present at 30 colleges across the U.S. In August of that year, Peter Thiel invested in the fast-moving upstart, helping the website accommodate the mass number of users, approximately 80% of undergrad students at participating universities, by May 2005. In September, Facebook decided to broaden the traditional target market to include high school students, allowing the company to reach 7.5 million registered users by April 2006. Today, Facebook and Zuckerberg are adjusting from their recent IPO that took place in February 2012. The decision to go public raised $16 billion and was the third largest IPO in U.S. history. By the end of this year, the number of Facebook members is estimated to near one billion. SWOT ANALYSIS Strengths Underlying Organic Growth Intelligent Management Team True Understanding of Target Markets: College & High School Students Frequency of Visits by Users Weaknesses Need to Constantly Differentiate from Competitors Inexperienced Management Team Much Control is with Users Slow Activity or Bugs/Issues with the Website are a Constant Concern User-Friendly Layout Top-of-Mind Brand Awareness Addicting Opportunities Expand Offerings for Facebook Users Great Platform to Advertise New Businesses Great Platform to Spread Word on Important Issues Threats Competitors Offering New Features Appealing to Young Market Becoming Comfortable/Complacent With Current Popularity User Privacy Concerns Expansion to International Markets Younger Generation Losing Interest Twitter The aspects of the Facebook company detailed in the SWOT analysis above support the strategy Zuckerberg and the rest of the management team have pursued. Facebook is a free service to members, generating revenue from advertising space and sponsored groups, which increases its popularity with the younger demographic. Its target markets consist of college students and high school students, but has stretched even further into middle school aged users as of late. This has helped Facebook establish strong brand loyalty with the market having the most potential for long-term use. In addition, because of this young market of intended users, Facebook puts the privacy settings in the hands of the user, allowing the individual to set their own privacy levels depending on what they are comfortable with. Furthermore, Facebook maintains a focus on functionality, keeping their website simple for its members to navigate and share information. Zuckerberg strives to create a culture of experimentation by employing a flat, organic structure that promotes creativity and innovation. This will further help Facebook differentiate itself from competitors, allowing it to ultimately achieve its goal to increase frequency of visits. Going forward, Facebook must examine what direction they want the popular website to take. Intended for college and high school students, the increasing number of middle school kids with Facebooks has turned many older users off of the website. Many of these younger members use the website frivolously and deluge others with information that they don’t necessarily care to see every time they go to their newsfeed. I recommend reinstating the “college,” or older student, aspect of the website that was intended at its inception. The purpose of Facebook is to share information and connect with friends and people around you, which younger children don’t necessarily need to do through online means. Friends may have moved away or gone to different colleges, making Facebook an effective tool for keeping in touch, but for the middle school demographic, it is not yet necessary for them to spend so much of their time on the website. I believe this is part of the reason Twitter has become so popular. Many people have stopped using Facebook as much and have gotten Twitter so they can follow specific people and keep in touch with friends that way. I also recommend Facebook continually work to streamline and simplify its new Timeline feature in order to make the transition easier for its users. Many Facebook members dislike changes made to the website, as they have to learn the new layout or navigation tools, but if Facebook can simplify it as much as possible, members will eventually accept changes made in the website. The Timeline feature is a unique aspect to Facebook that I think plays very well to the overall “experience” that users feel when on the website. It is an experience when you go on the website to connect with others and look through photos, relationships, or news. The Timeline merely exploits that aspect of the popular site. Finally, I recommend that Facebook use its creativity and innovative strengths to conjure up new revenue streams in order to justify and live up to its huge IPO valuation. With such a large market worth, the company must work to generate more profit for its shareholders than it is used to perhaps. However, it is important that advertising to create revenue does not overtake the website, as members will not appreciate endless ads in their face when trying to simply see what friends are doing. It must remain an experience, but also be a very profitable company.