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What we now know about Facebook

21 Replies Christopher Roberts

As you may have heard, Facebook plans to become a public limited company (plc) and float on the stockmarket. It hopes that this will raise around the sum of $5 billion USD (this is only about half what most people thought it would try to raise) in finance for the business, a colossal amount!

Facebook's LogoThanks to the flotation it is estimated that around 30% (roughly 1,000 people) of the companies employees will become millionaires! That said, Mark Zuckerberg is reducing his annual salary to just $1 as of January next year. Why? Because he will have shares estimated at the value of around $100 billion!

Anyway, due to Facebook wanting to become a plc, it needed to release more detailed financial data than it ever had before, into the public domain. This means that we now know much more about this previously rather secretive internet giant, than ever before!

Finances

Thanks to its choice to become a plc, we now know that Facebook makes 85% of its income from advertising. Furthermore we know that last year it made almost $4 billion USD! Out of this, it turned an impressive 25% into profit, bringing it in $1 billion (supposedly exactly) in net profit.

It is now possible to value to company as a whole, and it is thought to be worth $100 billion USD. To compare that to other industry giants, Amazon is valued around the same amount, eBay is values at about half that figure, and Google is thought to be worth double that.

Ownership

Facebook will still be owned and controlled largely by Mark Zuckerberg. He currently owns 28.4% of Facebook and has a majority in terms of voting rights with over 50% of votes. Basically Zuckerberg owns Facebook still, and he seems to want to stay in the driving seat for a while yet!

Mark Zuckerberg the founder of FacebookUsers

We now also know that Facebook have around 845 million active users around the world, of whom, around 450 million visit the site very regularly – that is a crazy amount!

The Future?

Facebook would be worth nothing without its users. Some people say that its users are not Facebook’s customers, but in fact the networks products. If people get bored or move on, the site will die.

If you were buying shares in an internet based business, Google would probably be a much safer bet than Facebook, as its future looks much more certain. Facebook may pay massive dividends to investors in the future, or it may go into decline and cost investors a collective $5 billion!


Friends Reunited was once great, now it stands in Facebook’s massive shadow, as does Myspace, Bebo, Foursquare and many other social media sites. All these sites how now been superseded by Facebook, the question is, will Google Plus or something else dwarf Facebook? Personally I believe that in 10 years, there will be something bigger, but we will just have to wait and see 🙂

Daily Deal Market Ripe For Consolidation

2 Replies Angeline

According to Yipit, there are 384 daily deal websites operating in North America that it knows about. This number is almost certainly far higher once you consider all the smaller sites that are not able to run deals each and every day.

So is the market too saturated? Is the industry doomed to fail because there are too many competitors competing for an ever shrinking supply of customers?

In 1876 Alexander Graham Bell demonstrated the telephone and one of the biggest communications companies of the time immediately dismissed it with the famous quote:

“This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.”

That company was Western Union and the lack of foresight for this new technology meant they were never able to compete in the profitable telecommunications industry – an industry which they had previously dominated with their telegram service.

Between 1894 and 1904 over six thousand telephone companies went in to business and from there mergers, acquisitions and closures happened to consolidate the industry to just a handful of companies today.

In 1939 there were 132 railroads in America, today that number is just seven as mergers, acquisitions and closures meant huge consolidation in that industry.

An early 1900's American train

The sort of train that powered America in the early 1900’s

In 2005 there were a huge number of social networks available, Myspace, Orkut, Bebo, Friendster and Classmates to name but a few. Today? We have one site, Facebook as the market consolidated.

In 2007 there was just one daily deal website worth mentioning which was Woot, a hugely popular and profitable website that continues to grow and increase its revenues. After the launch of Groupon it spawned off thousands of clones around the world, over 400 of them in American alone.

Since 2009 there have been 72 acquisitions in the daily deal industry, 44 coming in the last 6 months alone. Groupon have gone for an expansion by acquisition business model with at least 8 buys under its belt, Google too is eyeing up the industry with several acquisitions in the daily deal market to expand its Google Offers programme.

There are plenty of other acquisitions too, LivingSocial have bought at least seven daily deal sites and BuyWithMe have purchased 6 daily deal sites before they too have been purchased.

So just like other new inventions and markets spawned hundreds of clones, it might look like the daily deal market is in decline as the number of sites decreases but there is still a very healthy merger and acquisition process taking place as the deal market looks to consolidate and become profitable.

Google Plus – a breath of fresh air?

15 Replies bhattman

For years websites like MSN and Facebook have been growing in numbers. Many rivals, less efficient and less popular social networking website, have died out as they are crushed by the giants. But Facebook seems immune from the possibility of extinction, with a growing number of users currently at over 640 million users!

MSN had a golden period and enjoyed strong competition with Facebook. But the Microsoft owned site has 120 million users and falling. It looks like MSN will be joining the likes of Bebo, Digg and Myspace.  I myself deleted my Myspace account when I decided to hop onto the Facebook bandwagon.

But for years it seemed that Facebook would never be challenged, and that was the case, until, now! A company which has 15 times the amount of revenue is stepping up to the plate. Google. The internet giant is taking over world computing. With 85% of the world using Google as their search engine, 15% of internet browsers in the world are Google Chrome – but this is fast growing – and now the $30 billion company is preparing to take on Facebook with its own social network – Google+.

In its two month infancy it is showing similar trends to Chrome and is rapidly growing in usage with 20 million worldwide users at the moment. Although this may seem puny, bear in mind it isn’t open to the world public entirely just yet.  At the moment, Google+ is an invitation only site until it opens fully in a couple of months.

I have put my name down to use it on its somewhat large waiting list. But what is all the hype?

Key Feature:

  • Circles – This allows me to group my friends, so for example:
    • Music pals – Joe, Tom, Abby…
    • School pals – Michael, Adam…
    • Work Colleagues – Jane, Adam, Monica…
  • Hangouts – A 10 people group video chat
  • Sparks – Using Google’s search engine you can search for interests
  • The Stream – Users can see their Circles’ updates – similar to Facebook’s wall
  • +1 – Allowing people to recommend items and websites

These are just some of the functions available to use on +.  But is it what we are looking for?

The Google+ ProjectIn my opinion yes, just like Google Chrome did with Internet Explorer it will provide a breath of fresh air to the social networking industry and I think will be a very realistic competitor to Facebook.

It seems like it is made with much more quality and with far more enhanced features than Facebook, which has many problems, technically and pragmatically.

So I for one am really looking forward to joining it and setting up my profile when it becomes open to the public.