Facebook Future Strategy

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Executive Summary Facebook’s growth in user base and web integration has created a massive platform that reaches over a billion people. Facebook has been successful driving revenue by developing algorithms and application programming interfaces. These revenue drivers turned their social networking platform into an advertising tool, connecting third-party businesses to quality consumers. Although Facebook’s user base and revenue are growing at very rapid rate, there is concern with their future strategy. This paper addresses that concern and the doubt that the revenue streams the company has developed will be sustainable in the long-term. Examining Facebook’s history, competition, financials and target markets will reveal a direction for…show more content…
FB entered the mobile advertising space through its popular mobile application, developed several years prior proving very profitable. By the end of 2013, FB had jumped to more than double their failed IPO price. In 2014 they acquired the growing in popularity messaging app, WhatsApp, for $19 billion total in cash and stock options (Eisenmann et al., 2014). With approximately 1.4 billion MAUs in the beginning of 2015, FB is by far the largest social network in the world (Kemp, 2014). The technology and advertising industry is at a critical point where the companies that disruptively respond to tech trends, with innovation, will shape the industries’ future and secure the limited revenue streams for long-term sustainability. A full list of data supplied by the case study has been extracted and organized for reference in the Appendix. Issues/Problems Eisenmann et al. (2014)’s case study poses this question: Would new mobile advertising products continue to drive revenue in the long-term or should FB concentrate on developing their platform and assisting developers, possibly tapping into several historically elusive markets for the company? Extensive research on these two revenue drivers and their profit sustainability has allowed for the development of a future strategy and the uncovering of additional growth potential for the organization. Further defining each issue will be a
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