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Case Study: Business Problem Solving Maria Vega Ryan Lopez Xavier Baquero Nayle Pimentel
Summary of Facebook’s Dilemma Mark Zuckerberg founded Facebook on 2004.•Had over 300 million worldwide users by the fall of 2009.•Making it the leader in the market share of social networks ruling out MySpace and Twitter.•The dilemma is that maintenance of the Facebook site is too expensive.
Summary of Facebook’s Dilemma The attempts to sell online ads on the website has not been very successful.•Facebook ads are very cheap compared to other websites.•70% of its members are located outside the U.S., which makes is less likely for them to make online purchases.•Facebook now try to sell the information from their members, which has created controversy with them
Summary of Facebook’s Dilemma Other ventures Facebook attempt to gain popularity with the integration of applications.•Facebook has also launched Facebook Lite, in order to compete with Twitter.•Users have been continuously insisting on privacy, decreasing its valuation from investors.•Even though Windows bought 1.6% of the company for $246 million, its valuation has been too volatile.•Valuation has ranged from $3.7 billion to $10 billion
1. What concepts in this chapter are illustrated in this case?Wireless Internet connections growsrapidlyPowerful handheld devices supportmusic, Web surﬁng, and entertainmentThe internet broadband foundationbecomes stronger. More than half theInternet user population join an onlinesocial networkThe e-commerce marketplace is toocrowded.
1. What concepts in this chapter are illustrated in this case?
2. What is the role of E-commerce and Web 2.0 Technologies in Facebook’s widespread popularity?•Company’s use Facebook tocommunicate with potential customers•The site is a marketing tool.•Facebook platform is beneficial to thedevelopers:• Provides them with a platform forapplications that are fully compatiblewith the site.•The applications make Facebook astickier destination for users due to havingthe ability to do more of the things theylike to do without having to leave the site
3. Describe the weaknesses of Facebook’s privacy policies and features. What management, organization, and technology factors have contributed to those weaknesses? Their weakness stems from the introduction of Beacon, the mishandling of News Feed, and the inefficient methods of deleting an account.1)Beacon was a program that shared users purchase information with their friends automatically.• Beacon was an opt-out program, which means that if you do not reject it you automatically accept it.• This later was turned into an opt-in program, which is a type of program that registers you as a user only when you accept..
3. Describe the weaknesses ofFacebook’s privacy policies and features.What management, organization, and technology factors have contributed to those weaknesses?2)News Feed shares your actionswith everyone on the Facebook Web. 3) Furthermore it was hard to delete your account unless userslooked for outside assistance from watchdog groups.
4. Does Facebook Have a Viable Business Model?•We think that Facebook doeshave a viable business model:•First of all Facebook is thelargest social network site andit is still growing.•It is highly valued today.•It is an opportunity formarketers to reach theirdemographic target audience.
5. If you were responsible for coordinating Facebook’s advertising, how would you balance the desire to become increasingly profitable with the need to protect the privacy of your users?•The privacy level of Facebook users is crucial for the well being of the network, therefore I would allow privacy controls just like Facebook does today.•This allows you to organize your friends into groups and pages therefore the user has to accept in order for you to access their proﬁle information.