While The World debates over when Facebook will go Public and what its Worth would be, Mark Zuckerberg is Worried about a Decision he has to make – Sell-off his 24% Stake & Bid adieu to Facebook or alter The Very Business Model by Diversifying. What should He Choose?
The opportunities? First comes “analytics”. Zuckerberg has to better realise the power of 500 million samples across 100+ countries. Facebook can serve research agencies and surveyors who are looking at demographic, psychological or other types of market researches. There is presently no clause that disallows “grouped data” to be furnished to third-parties. The situation is thus – Facebook has a mine it can monetise. Strangely, it is not doing so.
Facebook dreams of becoming the new-Google. But it isn’t doing what Google did on day #1 – it has no credible search business (except people), which is what primarily made Google worth $150 billion today, and forced Microsoft to risk a $47 billion bid for an outdated Yahoo! Search capability enhances the value of a web property and multiplies the revenue inflow manifold. How? Google crossed the $10 billion revenue mark when it was seven years old. Facebook is already six and hopes to cross the $1 billion mark only by 2010-end. Facebook is also missing out on the places where netizens spend most of their time – the Inbox. Facebook’s mailing system is outdated, looks rigid & clumpy and is almost impossible to organise. Mails give the most important dimensions to online networking. Most know this; some don’t. Does Zuckerberg?
Facebook can take a lesson or two from the $32 billion Tencent (the Facebook of China), which is listed on the Hong Kong Stock Exchange. Tencent has 100 million less users, but crossed the $1 billion topline 3 years back. In FY2009, Tencent recorded a topline of $1.8 billion, from only subscription fees and gaming. Facebook has to take inspiration from Tencent on how to squeeze the juice out of a social-networking site’s user count by using “loyalty” as bait. As per data furnished by Nielsen, an average user spent a little over 6hr 43 minutes on Facebook in April 2010 – the maximum amongst all websites. This is a strength that it has to play on to monetise the loyalty factor. [And the “It’s free, and always will be” punch-line on its homepage is precisely what we are not advising.]
In the recent months, Google has shown its intentions to get a grab on social networking, with purchases like Slide, Like.com, Ångströ, Metaweb and Jambool. These were after its in-house efforts bombed. If Google can do what Facebook is doing best, Zuckerberg too can return the favour. Diversify or sell-out when you’re worth billions is the option. He made the right choice four years back. Will he again? [As this story went to print, Google was working on building the next big social network to compete head-on with Facebook. It’s a ‘secret’ called “Google Me”.]
Facebook dreams of becoming the new-Google. But it isn’t doing what Google did on day #1 – it has no credible search business (except people), which is what primarily made Google worth $150 billion today, and forced Microsoft to risk a $47 billion bid for an outdated Yahoo! Search capability enhances the value of a web property and multiplies the revenue inflow manifold. How? Google crossed the $10 billion revenue mark when it was seven years old. Facebook is already six and hopes to cross the $1 billion mark only by 2010-end. Facebook is also missing out on the places where netizens spend most of their time – the Inbox. Facebook’s mailing system is outdated, looks rigid & clumpy and is almost impossible to organise. Mails give the most important dimensions to online networking. Most know this; some don’t. Does Zuckerberg?
Facebook can take a lesson or two from the $32 billion Tencent (the Facebook of China), which is listed on the Hong Kong Stock Exchange. Tencent has 100 million less users, but crossed the $1 billion topline 3 years back. In FY2009, Tencent recorded a topline of $1.8 billion, from only subscription fees and gaming. Facebook has to take inspiration from Tencent on how to squeeze the juice out of a social-networking site’s user count by using “loyalty” as bait. As per data furnished by Nielsen, an average user spent a little over 6hr 43 minutes on Facebook in April 2010 – the maximum amongst all websites. This is a strength that it has to play on to monetise the loyalty factor. [And the “It’s free, and always will be” punch-line on its homepage is precisely what we are not advising.]
In the recent months, Google has shown its intentions to get a grab on social networking, with purchases like Slide, Like.com, Ångströ, Metaweb and Jambool. These were after its in-house efforts bombed. If Google can do what Facebook is doing best, Zuckerberg too can return the favour. Diversify or sell-out when you’re worth billions is the option. He made the right choice four years back. Will he again? [As this story went to print, Google was working on building the next big social network to compete head-on with Facebook. It’s a ‘secret’ called “Google Me”.]
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
