Article Critique on Facebook's future - Essay Example

inserts his/her full Article Critique on Facebook’s future Facebook has been largely praised for revolutionizing the social networking paradigm and providing a niche and even micro marketing platform for advertisers to target specific customers based on their interests and activity on Facebook. However, the company has been criticized for not doing enough to improve the stock price. Market expectations regarding buyouts, development of a Google-like search engine or a new smart phone have been slashed as minor developments such as adding features seem to be at the epitome of the company’s business strategy at the moment. Nevertheless, the unprecedented success of the user-centric business model of Facebook and its latest foot forward into the mobile industry are major factors that shall shape the future of Facebook. Facebook has truly revolutionized the field of social networking and the way in which millions of users across the world can communicate for free with each other and share their interests, hobbies, activities etc. This is nothing less than a powerful customer database that keeps track of the demographics, psychographics and geographic traits of its customers. However, the collapse of Facebook’s stock has put tremendous pressure on the future of the company. This is because the market had been expecting something revolutionary such as an acquisition, creation of a Smartphone or the development of a search engine similar to that of Google. The announcement of the Graph Search feature and the absence of scope for revenue generation through it, however, shunned these expectations and the share prices fell (Eichenwald). This suggests how Facebook’s future is largely hinged with its ability to offer either paid content or attract sufficient advertisers that enable the company make high profits. At the epitome of Facebook’s business model is the fact that the company offers data compilation and acts as a database of users is more significant than the motive of money creation (Eichenwald). Enhancing the financial strength of the company, therefore, requires establishment of newer business models. Furthermore, using the Facebook database as an advertising medium such that the site becomes attractive enough for advertisements remains a challenge. Most ads on the web require users to click on an item to purchase it. However, since Facebook’s business model was not based on immediate sales, it would remain a challenge to incorporate such ads. Even if the company did go ahead with these ads, it is difficult to predict how they would be compatible with the social networking feature offered by the company. Companies such as Google manage to generate ads by using the pay-per-click model where, once users indicate their willingness to buy an item through the search engine, they are flooded with ads (Eichenwald). This, however, remains a remote possibility for facebook. The most intriguing question perhaps is how to use the personal data that is uploaded by users almost every minute onto Facebook? This has, to some extent, been answered by the buzz marketing generated by Facebook Pages whereby advertisers interact one-on-one with customers and learn from their feedback. As opposed to Google that fulfilled customers’ demands, Facebook is stimulating demand (Eichenwald). A major leap in Facebook’s success was brought on by its famous mobile advertising platform where advertisements could be placed in users’ newsfeed (Eichenwald). This allowed ads to go mobile rather than being just restricted to laptops. Also, this has been a breakthrough compared to typical banner ads which interfered with users’ online experience. Even though the net-positive results of having this feature favored its existence, various criticisms have surrounded it. The most important concern is that users are bombarded with advertisements which, sometimes, translates into fewer posts regarding friends compared to posts regarding ads. This puts off majority of users and can limit the potential usefulness of such ads. Breaking the clutter presents a challenge to Facebook; since it is not an online shopping site or one leading to direct purchases users’ expectations from Facebook are different from other online shopping sites or even search engines. Since users expect social interaction than buying products, the ads could mean Facebook digressing from its core mission. It is clear from the above that the future of Facebook lies in advertising including mobile advertising. At the very least, the platform of games on Facebook allows game developers to target particular users of their games as is the case with Zynga (Eichenwald). However, privacy remains a major hurdle in the advertising process with the advertising companies unwilling to share their information with Facebook. Although encryption has been used to overcome this, privacy of users’ information still remains an issue to be dealt with. Furthermore, the click-per-ad model remains a poor predictor of sales off-line which limits the usefulness of the online advertising model (Eichenwald). Although mobile is the future of Facebook, it will have to offer the same speed and efficiency on its mobile application as it does on desktop. Nevertheless, the corporate culture that governed internal rules, policies and procedures in Facebook is one of Facebook’s biggest strategic strengths as it encourages openness, trial and error and equality of employees as opposed to a bureaucratic culture that can stifle growth. Team-working, flexibility and user-centric moves is at the heart of Facebook’s strategy unlike other companies that aim to enhance revenues by attracting advertisers and other parties. Constantly improving Facebook’s interface to make it more user-friendly and to allow users greater control over their data in the midst of privacy concerns is what makes Facebook a promising platform for the future. To conclude, it is an undoubted fact that Facebook’s unique business model is unmatched with any of its competitors. The company’s future lies in how well it can dominate the market for mobile users and use its open internal culture to test totally new and unexplored venues. At all times, the concern for users’ privacy will remain a force to be dealt with. Furthermore, venues other than displaying ads in the newsfeed will have to be developed to break the clutter. Work Cited Eichenwald, Kurt. "Facebook Leans In." May 2013. Vanity Fair. Web. 22 June 2013. Read More