Facebook for All
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  • Facebook is seeking avenues to grow as a company and address competitors in the continuously changing social networking landscape.
  • Points of interest:1) “Facebook helps you connect and share with the people and businesses in your life.”2) Search bar on left side allows public access to Pages.

Facebook for All Facebook for All Presentation Transcript

  • forAll
    George Dy, Tian Wang, Timothy Yung, Anhang Zhu
  • Agenda
    Background
    Social Media Landscape
    Strategic Issues
    Target Audience
    Recommendation
    Solutions
    Solution 1: Interactive Facebook Pages
    Solution 2: Extend Facebook Credits
    Solution 3: Develop a Facebook Marketplace
    Solution 4: Facebook Questions
    Financial & Technological Impact
    Implementation Timeline
    Conclusion
    Facebook for All
  • Background » Recommendation » Solutions » Impact » Timeline » ConclusionSocial Media Landscape
    Facebook General Statistics
    400+ million users1
    500,000+ active applications1
    1.5+ million businesses have Facebook Pages1
    2.7% of Global Search Search Growth2
    Social Media Statistics
    58.59% on Facebook3September 2009
    30.26% on MySpace3September 2009
    Facebook for All
    1 http://www.facebook.com/press/info.php?statistics
    2 http://www.insidefacebook.com/2010/04/10/facebooks-search-traffic-continues-to-grow/
    3 http://www.hitwise.com/index.php/us/press-center/press-releases/2009/social-networking-sept-09/
  • Background » Recommendation » Solutions » Impact » Timeline » ConclusionStrategic Issues
    Reinforce Facebook’s mission to give people the power to share and make the world more open and connected.
    Facebook for All
  • Background » Recommendation » Solutions » Impact » Timeline » ConclusionTarget Audience
    Cater to existing audience
    Indirectly target older audience
    Business is globalized
    People all over the world have local businesses
    E-commerce plays an increasing role in GDP
    Exploits Facebook’s language support
    Target independent artists and musicians
    Facebook for All
  • Background » Recommendation » Solutions » Impact » Timeline » ConclusionAlternate Audiences
    Why not target teens?
    Why not target children?
    Teenage demographiccontinues to increaseregardless of marketing.
    Facebook for All
    1 http://www.istrategylabs.com/2010/01/facebook-demographics-and-statistics-report-2010-145-growth-in-1-year/
  • Background » Recommendation » Solutions » Impact » Timeline » ConclusionRecommendation
    Facebook must provide a suite of functions to attract users outside key demographics
    Facebook must develop products that create a richer and more interactive experience for businesses
    Facebook must utilize personal social networks to address competing services like MySpace and Yelp, and provide competing resources for independent artists and restaurants
    Facebook for All
  • Background » Recommendation » Solutions » Impact » Timeline » ConclusionFour Solutions
    Solution 1: Interactive Facebook Pages
    Solution 2: Extend Facebook Credits
    Solution 3: Develop a Facebook Marketplace
    Solution 4:Facebook Questions
    Facebook for All
  • Background » Recommendation » Solutions » Impact » Timeline » ConclusionSOLUTION 1 Interactive Facebook Pages
    Problem
    Users without online social networks lack incentives to use Facebook
    Facebook Pages lack user interaction and general accessibility
    Goal
    Establish Facebook Pages to become the de facto social profile for businesses
    Expand Facebook Pages to serve as interactive avenues for general users, not just Facebook users
    Facebook for All
  • Implementation
    Improve general accessibility to Facebook Pages
    Removing “login requirement” increases available audience
    Redevelop Facebook landing page to include page search or directory browsing based on locality
    Begin by targeting restaurants and independent artists to establish Facebook Pages as the default profile for businesses and artists
    Create modules catered to specific page categories
    E.g. reservations for restaurants, music store for artists
    Results
    Expand Facebook’s user base and retain existing users by providing a more interactive experience
    Monetize Facebook pages by offering premium modules
    Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionSOLUTION 1 Interactive Facebook Pages
  • Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionSOLUTION 1 Front Page Mockup
  • Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionSOLUTION 1 Reservations Module Mockup
  • Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionSOLUTION 1 Reservation Notifications
  • Problem
    Third-party developers are using Facebook’s user base and creating more competition for Facebook (e.g. iLike).
    Facebook Credits only used for Gifts (which accounts for 30% of Facebook’s revenue)
    Users are not aware of Facebook Credits and the potential business models are not fully exploited
    Goal
    Promote the use of Credits across more Facebook properties to increase trust in Facebook as a business
    Enable Facebook to serve as a middleman to conduct transactions between its users and itself or businesses
    Use Credits as a method to utilize Facebook’s exclusive eCommerce-style marketplace
    Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionSOLUTION 2 Extend Facebook Credits
  • Implementation
    Allow users to purchase (via gift cards or electronically) Facebook Credits and use them in applications
    Allow users to store and manage credit card information
    Allow users to purchase goods directly via credit card or other services (e.g. PayPal, Google Checkout)
    Develop in-house and acquire promising 3rd-party applications
    Offer incentives to use Facebook Credits outside of the new use for purchase of tangible goods in the marketplace
    Allow Facebook Page owners to upgrade their service for enabled access to specialized business modules
    Results
    Greater monetization for the use of in-house or acquired Facebook applications, increasing revenue streams
    Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionSOLUTION 2 Extend Facebook Credits
  • Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionSOLUTION 2 Existing Business Model
  • Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionSOLUTION 2 Potential Business Model
  • Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionSOLUTION 2Facebook Gift Cards
  • Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionSOLUTION 3 Current Facebook Marketplace
  • Problem
    Facebook does not exploit all the potential eCommerce opportunities involving social networks
    Facebook lacks an avenue for vendors (e.g. with Pages) to sell products and services
    Goal
    Acquire Facebook Marketplace as the de facto destination for all Facebook users looking to shop within friend networks or local businesses
    Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionSOLUTION 3 Develop a Facebook Marketplace
  • Implementation
    Acquire Facebook Marketplace from Oodle.com
    Aggregate all products offered by users or businesses in the Facebook Marketplace
    Create a Facebook Marketplace shopping cart and wish list to aggregate purchases and allow sharing product lists with friends
    E.g. Wishlists will appear on user profiles during birthdays
    Allow users to make online transactions
    Results
    Increase revenue through business and featured product listings
    Encourage the use of Facebook search for eCommerce
    Develop Facebook into a sales intermediary between users, taking a percentage of seller fee
    Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionSOLUTION 3 Develop a Facebook Marketplace
  • Problem
    Facebook is lacking a strong community feel outside of personal networks
    New users lack retention rate because questions are often left unanswered
    Goal
    Develop a stronger Facebook community outside of friends networks to promote higher retention of new users and provide incentives for active users
    Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionSOLUTION 4Facebook Questions
  • Implementation
    Create Facebook Questions to provide a community that answers new user questions about Facebook or anything trending
    Develop a strong community feel that offers support and the promotion to Facebook Expert, which is a title that is offered to the users with highest answer count
    Users can connect with people outside of personal networks if they are lacking friends, greater incentive to stay on Facebook
    Results
    Retain new users and provide stronger community incentives to increase time spent on Facebook by existing users
    Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionSOLUTION 4Facebook Questions
  • Background » Recommendation » Solutions » Impact » Timeline » ConclusionFinancial Impact
    Estimated Annual Profit for Marketplace
    ($60BTraded2)/(90MActive Users2) = $667Traded per Active User
    ($8.7BRevenue)/($60BTraded2) = 14.5%Revenue Margin on Traded Goods
    ($2.4BProfit)/($60BTraded2) = 4%Profit Margin on Traded Goods
    Estimated active users that make at least $50k per year:
    (400M Active Users)(67%1) = 268MPotential Marketplace Users
    1 http://www.socialtimes.com/2010/04/demographic-of-the-7-most-popular-social-media-sites-infographic/
    2 http://investor.ebayinc.com/
    Facebook for All
  • Additional Datacenter
    Due to the increased use in user base and Facebook Marketplace, Facebook will be required to upscale its datacenters in preparation for the surge in traffic
    Even though Facebook has already begun building a 35-acre custom datacenter in Oregon that is scheduled to be available in June 2011, Facebook needs to have enough hardware until this datacenter is complete
    Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionTechnological Impact
  • Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionTechnological Cost
    Estimated Total Cost for Development
    Server Cost (775MUsers in June 20111)/(220MUsers in May 20092)
    = 352% user base growth($25Mserver cost in June 20112) * 352%4
    = $88Mprojected server cost in June 2011
    Operation Cost for Marketplace
    Average: $9.38B
    High: $15.01B
    Low: $1.88B
    1 http://www.insidefacebook.com/2010/04/06/facebook-sees-solid-growth-around-the-world-in-march-2010/
    2 http://www.facebook.com/press/info.php?timelined
    3 http://www.salarylist.com/all-real-jobs-salary-at-facebook-inc.htm
    4 assuming data grows parallel with user growth, compounded over 15 months
  • Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionTechnological Cost
    Estimated Total Cost for Development (cont.)
    Labor Cost
    ($70KAnnual salary for Software Engineers1/12 months per year)*(50Software Engineers)*(9 months)= $2.63M in labor
    Estimated Acquisition Cost
    1 http://www.websiteoutlook.com/
  • Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionImplementation Timeline
  • Stronger Facebook community outside friend networks
    Stronger monetization through Facebook Marketplace
    Utilization of Facebook Credit, line of currency exclusive to Facebook users for exclusive Facebook offers
    Pages become a default profile for business and independent artists, eliminating competition from Yelp and MySpace
    Facebook for All
    Background » Recommendation » Solutions » Impact » Timeline » ConclusionConclusion
  • Questions
    Facebook for All