FACEBOOK CASE Case Solution & Answer

Company History

Facebook was made as an alternative to the printed student directory of Harvard in February 2004 by Mark Zuckerberg and two of his roommates. This initial site was forwarded to several list servers of several campus groups. This website was similar to the other websites that had the profiles of the users and they connected different people through the connection ties. However, the different with this site was that it restricted the access to those individuals only that had an .Edu email address and through this the site focused on real world relationships.

Profile visibility was also restricted in this initial website. Within the first month of the launch of the website around 3 quarter of the Harvard students had registered and only four months after the launch of Facebook, it was serving 150,000 users and 30 college networks. It was this time, when Zuckerberg had decided to drop out of Harvard and pursue Facebook full time and then the site was expanded for 800 college networks in the US. In 2005, FB introduced the photo sharing features and this allowed to have 5.5 million users by the end of 2005.

In order to finance the rapid growth of FB, Zuckerberg had raised financing from different sources to grow the company and he rejected the acquisition offer of $1 billion by Yahoo in 2006. It was in September 2006, when FB opened its registration to the work places and then to all the people. During the next 8 months the visitors had increased by 10% per month and according to the latest year data in 2013, the visitors on FB have tripled in its numbers of visitors of 25 to 35-year-old monthly visitors.

Facebook Business

The basics of the business of FB should remain the same and it should expand within the social media industry. The money making model of FB has always been simple and FB should continue with the same business model. The business model where the visitors create their profiles and create their own content such as likes, photos, updates, comments and links where the company sells ads to the content or the either of the person. This brings in the bulk of the revenue for the company. Other revenues come from the third party apps and other sources. Therefore, FB should remain in the same business but growing the number of the visitors is not the long term viable strategy for the company. Instead, the company should increase the time spent per user and also increase their advertising rates with a better value for the advertisers.

Value Proposition of Facebook and Adding Value to Business

The value proposition of FB is that it is a social utility that connects everyone around and the core value proposition of the company is that ‘everyone is doing it’. Fb is adding value to its business by emphasizing on its visitors. Fb pursues the customer needs and it supports the value delivery network system by providing an effective way to the customers for managing their social life, making the site free to use, customizing their public profiles and matching the expectations of the users…………………………

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