As Facebook announced its upcoming IPO, lots of interrogations are still pending about the relevance of such an important valorization, whereas the website’s revenues are still border line. This longed-for IPO is the occasion to come back on the short history of this social network and to understand better the bases on which he is developed. It’s also the occasion to anticipate the issues which it would facing with, to forecast the areas of growth that would enable it to concretize his current success, and see how this company might be a potential source of benefits.

1. Facebook:
an
investment
for
the
future
IDEAS4TOMORROW.com
08/05/2012

2. A
quick
growth
(1/2)
A
con&nuous
worldwide
growth
of
the
number
of
users…
§ Facebook
was
launched
in
2007
A
quick
growth
of
the
number
of
users
A
worldwide
phenomenon
Millions
of
monthly
acNve
users
Millions
of
monthly
acNve
users
1
000
180
901
153
160
800
140
680
120
600
100
431
80
400
60
44
43
38
197
40
30
200
24
23
20
0
0
Q1
2009
Q1
2010
Q1
2011
Q1
2012
Launched
in
the
USA
Facebook
is
now
available
in
78
languages.
IDEAS4TOMORROW.com

3. A
quick
growth
(2/2)
…
spending
lots
of
&me
on
Facebook,
then
genera&ng
an
exponen&al
turnover
Users
are
spending
lots
of
Nme
on
Facebook
An
explosion
of
the
annual
turnover
Comparison
between
Nme
spent
on
Facebook
and
Google
Turnover
(m$)
1200
1090
6
000
+45%
5
380
Facebook
1000
850
Google
5
000
800
4
000
+100%
3
710
600
3
000
400
299
226
1
855
2
000
+139%
200
777
30%
0
1
000
of
Millions
of
users
Millions
of
minutes
spent
margin
§ In
Europe,
12%
of
the
Nme
spent
on
the
web
is
on
0
2009
2010
2011
2012*
Facebook
§ In
France,
users
spent
4h45
per
month
on
Facebook
*
Forecast
based
on
Q1
2012
turnover
Facebook’s
current
turnover
is
4,70
$
per
user
IDEAS4TOMORROW.com

4. A
start
of
diversificaNon
Facebook
reduced
by
13%
its
reliance
on
adver&sing
Facebook’s
non
adverNsing-­‐based
revenues
are
increasing
EvoluNon
of
the
turnover
split
2009
2010
2011
2%
3%
5%
12%
AdverNsing
95%
85%
98%
Zynga
(video-­‐game)
$777m
$1,855m
$3,710m
Other
§ 96%
of
Google’s
revenues
are
sNll
based
on
adverNsing.
§ Facebook
is
open
to
applicaNons
which
can
provide
it
some
revenues
(e.g.
Zynga
a
social
network-­‐based
video
game)
§ Facebook
allows
brands
to
open
their
own
store
on
the
website
(ASOS,
Groupon,
Pizza
Hut
UK)
IDEAS4TOMORROW.com

5. A
latent
potenNal
of
growth
The
number
of
users
might
keep
increasing
In
developed
countries,
Difference
between
Internet
and
Facebook
penetraNon
rate
remains
high
79%
81%
83%
85%
78%
49%
47%
48%
37%
28%
95
12
44
26
23
In
emerging
countries,
Both
Internet
and
Facebook
penetraNon
rates
are
very
low
§ Facebook
is
not
yet
available
in
few
main
emerging
countries:
41%
18%
China
:
460
million
of
Internet
users
19%
8%
9%
4%
Japan
:
104
million
of
Internet
users
Russia
:
70
million
of
Internet
users
41
47
-­‐
Million
of
Internet
users
Facebook
penetraNon
rate
Internet
penetraNon
rate
which
are
not
on
Facebook
IDEAS4TOMORROW.com

6. Development
of
social
graph
A
new
organiza&on
of
the
Internet
§ Facebook
introduced
the
concept
of
social
graph
where
users
are
linked
together
because
of
friendship
§ The
next
step
is
the
interest
graph
were
users
are
linked
together
because
they
share
common
interests
§ Based
on
the
interest
graph,
Facebook
aims
to
-­‐ ease
the
organizaNon
of
the
Internet
-­‐ opNmize
the
content
browsing
on
the
Internet
§ Google
has
already
started
to
display
the
contents
published
on
its
own
social
network
Google+
directly
on
its
search
engine
Internet
is
facing
with
a
major
turn
in
the
way
users
are
browsing
it,
and
Facebook
introduced
this
revoluOon
IDEAS4TOMORROW.com

7. Mobile
is
the
key
growth
engine
(1/2)
Mobiles
are
the
main
technological
devices
Worldwide,
the
mobile
phones
are
more
spread
In
2011,
mobile
devices
sales
than
Internet
access
overtook
PC
sales
UK
84,8%
Million
of
devices
sold
133,1%
551
Fra 77,5%
nce
99,2%
63
Ger 82,5%
ma 127,7%
Chi 34,4%
na
72,0%
351
Ind 9,1%
29
one 104,8%
Indi 7,8%
488
112
a
80,5%
Bra 40,7%
zil
116,4%
Can 81,4%
210
ada
73,3%
USA
79,3%
92,8%
Mobile
penetraNon
rate
Internet
penetraNon
rate
Mobile
devices
PC
Smartphone
Pad
Notebooks
Desktops
Netbooks
§ 50,4%
of
US
consumers
are
using
smartphones
(Q1
2012)
IDEAS4TOMORROW.com

8. Mobile
is
the
key
growth
engine
(2/2)
Facebook
developed
few
ini&a&ves
to
improve
mobile
experience
§ During
the
Q1
2012,
500
million
of
users
were
connected
through
mobile
applicaNons
§ Facebook
developed
mobile
applicaNons
on
most
famous
OS
(Androïd,
iOS)
§ In
Africa,
Orange
launched
a
special
access
to
Facebook
for
non-­‐smartphone
users
– Based
on
USSD
technology
– Payment
per
cession
– Simplified
profile
§ For
the
Nme
being,
Facebook
gets
no
revenues
from
mobile
users
(no
adverNsing
on
the
mobile
applicaNons)
§ But,
Facebook
planed
to
launch
sponsored
post
on
its
mobile
applicaNons
to
improve
adverNsing
display
on
mobile
devices
§ Recently,
Facebook
bought
Instagram
and
Glancee
which
were
successful
mobile
applicaNons
To
ensure
revenues
growth,
Facebook
will
have
to
moneOze
its
mobile
audience
IDEAS4TOMORROW.com

9. DiversificaNon
of
revenues
To
keep
growing
Facebook
has
to
find
new
sources
of
income
Facebook
got
into
partnerships
New
opportuniNes
to
moneNze
the
audience
to
opNmize
content
sharing
§ Music
§ Facebook
might
take
a
percent
of
the
revenues
generated
through
its
website
on
the
applicaOon
connected
to
it
(it’s
already
the
case
with
Zynga)
§ Video
§ Facebook
is
working
on
developing
the
adverOsing
on
mobile
applicaOons
§ Video
on
demand
§ Facebook
plans
to
develop
its
own
currency
(the
“F-­‐money”)
which
could
be
used
both
on
its
website
and
through
the
Internet
§ Newspaper
To
sustain
its
growth,
Facebook
is
improving
its
current
growth
engines
and
developing
new
ways
to
moneOze
its
audience
IDEAS4TOMORROW.com

10. A
huge
data
base
Facebook
collected
more
data
than
a
website
has
ever
done
§ With
900
million
users,
Facebook
has
a
lots
of
data
based
on:
-­‐ Personal
informaNon
(pictures,
videos,
…)
-­‐ Users’
behaviors
(likes,
localizaNons,
exchanges,
…)
§ Facebook
developed
“Social
Ad”
instead
of
Google’s
on-­‐words
based
adverNsing
§ “Social
Ad”
is
based
on
the
analysis
of
personal
data
§ This
analysis
refines
customers
targeNng
§ Facebook
developed
a
wide
range
of
Ad
products
-­‐ Normal
Ad
displayed
on
the
website
-­‐ Premium
Ad
displays
your
firends’
like
(which
is
more
expensive)
§ Facebook
would
be
able
to
improve
its
product
development
based
on
its
customers’
need
Facebook
has
an
advantage
as
data
collecOon
and
analysis
becomes
the
key
of
the
Internet
evoluOon
IDEAS4TOMORROW.com

11. A
strong
compeNNon
The
Internet
is
becoming
more
and
more
social
The
World’s
Internet
leader
Worldwide
segmented
social
is
pushing
its
own
social
network
networks
are
thriving
§ Professional
§ Google
has
more
than
1
billion
users
§ Photography
sharing
(Instagram)
§ In
June
2011,
Google
launched
its
own
social
network
Google+
§ Micro-­‐blogging
(Twi`er)
§ Google+
is
based
on
circles
interacOon
§ +90
million
users
(Q1
2012)
§ In
China,
RenRen
has
+200
million
users
§ Google
plans
to
use
the
Google+
contents
to
(96,2%
are
Chinese)
enrich
its
search
engine
results
Facebook
is
facing
with
both
a
big
compeOtor
and
numerous
small
actors
IDEAS4TOMORROW.com

12. Analysis
of
the
IPO
valuaNon
Facebook’s
IPO
is
over
the
benchmark
§ Facebook
is
supposed
to
be
valuated
between
$77
billion
and
$96
billion
§ Facebook’s
IPO
valuaNon
raNo
is
-­‐ between
15x
and
19x
its
turnover
-­‐ between
$85
and
$106
per
user
EvoluNon
of
the
stock
prices
of
the
last
Benchmark
of
3
tech
companies
introduced
Internet
companies
§ Google
is
the
famous
Internet
leader
§ Groupon
:
-­‐50%
(since
nov.
2011)
§ Amazon
is
the
most
famous
entertainment
§ Zynga
:
-­‐18%
(since
dec.
2011)
contents
seller
§ LinkedIn
:
+10%
(since
may
2011)
§ Apple
:
the
most
famous
technological
devices
maker
=>
Bencharmk
is
roughly
5x
the
turnover
IDEAS4TOMORROW.com

13. SensiNvity
table
Evolu&on
of
the
turnover
per
user
§ Based
on
a
raNo
of
5x
the
incomes
§ Depending
on
the
evoluNon
of
the
number
of
users
§ Depending
on
the
evoluNon
of
the
valuaNon
(vs.
$80
billion
of
IPO’s
price)
Evolu&on
of
the
number
of
users
Evolu&on
of
the
valua&on
Whithout
any
change
in
the
number
of
users
and
the
valuaOon,
Facebook
has
to
increase
its
turnover
per
user
by
5
Omes
to
be
in
the
benchmark
IDEAS4TOMORROW.com

14. Bibliography
§ Wikipedia
§ Orange
Actu
§ Lefigaro.fr
§ Latribune.fr
§ Lexpress.fr
§ LeMonde.fr
§ Challenges
§ Références.be
§ The
Economist
§ Financial
Times
§ Le
Journal
du
Net
§ Techcrunch
§ CheckFacebook
§ The
Next
Web
§ INSEE
§ Etude
Canalys
§ Rapport
de
ZenithOp&media
§ Inside
Facebook
§ ParisTech
Review
§ Google
Public
Data
§ Perspec&ve.Usherbrooke
IDEAS4TOMORROW.com

15. www.Ideas4Tomorrow.com