Myassignment.live is not sponsored or endorsed by this college or university
Facebook is considered to be one of the fastest growing e-commerce company that have a very strong innovative value on its start-up, created by Mark Zuckerberg, the founder of the company, in the year 2004. As a young entrepreneur, he managed the organisation effectively and ensure a continuous growth and sustainability (Turban et al. 2015). It is under the leadership of Zuckerberg that Facebook today, has become the fastest growing social networking website in the world. It strived for connecting people all around the globe having a clear mission for giving people the strength and power of making the world more connected and more open. It aims towards helping the individuals to share, discover and to express themselves to their family and friends. A great opportunity for Facebook to grow is gained by the emergence of mobile phones. It is to note that Facebook was often accessed through its full website on computers (Lubian and Esteves 2017). But, with the emergence of increasing trend was to make it usable on the go, through mobile phones and smart phones. However, this trend further resulted in a significant challenge to the ability of Facebook for collecting revenue as of the fact that advertisements were very tough for placing on the mobile applications of Facebook without compromising the experience of the users. Still, there are a wide number of opportunities present for the company to develop and growth in international borders. It has the opportunity of diversifying beyond its key online advertising and social media business. Notwithstanding this fact, there are also several issues at Facebook like that of privacy that is of high importance and that is a major factor stop Facebook from further growth and development.
Despite of the world-wide great achievement, Facebook is facing some strong challenges like competition from the parts of micro blogging services such as “Twitter”, managing the expectations and needs of the young generation, the tech savvy adopters who demands for more open social interactions, maintenance of the old users who need some selective and limited social realms and radical changes on the home pages of the readers (Ruehl and Ingenhoff 2015). With the same, it is also to mention that the quest of Facebook for becoming a leading social interaction website, along with an important tool for business and personal networking for the ones who are connected is continuously hampered by a huge challenge like that of competition from the rivalries, the lawsuits, privacy problems and the need for providing some better interaction services and maintaining its credibility. One of the other risks that was pertained for the ability of Facebook to stay a private company was that of Forced IPO (Initial Public Offering). The rule of “United states Securities and Exchange Commission (SEC) required the private firms with more than 500 owners to abide by the practices of accounting a disclosure that are required of the public firms by Sarbanes-Oxley Act of 2002 (Li 2014). This rule is the reason behind why Google took the decision of going public in the year 2004. This is why, Facebook is also at the risk of having an IPO in the coming future. This paper shall elaborate on providing a brief background of the case and suggest some alternatives and tactics to help Facebook maintain its positive long-term market performance.
Facebook is considered to be the largest social media firms present in contemporary world. The original Facebook website went live in the year 2004. It spread rapidly and just by the end of the same month, (February), there were about ten thousands of users who successfully registered on the Facebook website (Harper, Kennett and Reisel 2015). It is also to note that Facebook was set apart from the other available social networking sites like Orkut, MySpace and Friendster and in this way it developed from one college to another with the use of dot-edu email address as a verification of a collegiate affiliation and an identity of the new users. However, by the end of May, 2004, the company achieved several milestones including redesigning and re-launching the Facebook site, upgrading and added to the back-end infrastructure of Facebook, appointing Sean Parker as the president and receiving about 500,000 dollars in seed capital from Peter Thiel (one of the prominent venture capitalist) (Barrigas et al. 2015).
The company hit 1 million of users by December 2004 and by May 2005, it had managed to hit 2.8million of users at 800 colleges. Such a significant growth and development of Facebook notably sparked a bidding war among about 12 venture capital companies who were eager to take part in the success of Facebook (Montgomery 2015). Winner among these dozen of firms was the Accel Partners that invested about 1.7million of dollars in a deal that valued Facebook at 100million dollars. By the end of 2006 again, the company was considered to be the 2nd largest social networking site after the MySpace. At about 12million active users, it was about a quarter of the estimated 43million of users of MySpace. At an average, the users of Facebook started spending about an hours on the website every day and this figure started growing every month (Mukherjee 2015). Its 4th quarter and full-year 2015 performance has proved that the firm has a well-focused approach and at the same time, has a lot to offer to the company shareholders. Today, the company has a huge reach with about 1.2 billion regular active users. Also, its wide reach and shortage of competition is very important for the success of the company. With high penetration of internet along with the acquisitions of Instagram and WhatsApp, Facebook has very effectively positioned itself as a market leader.
The financial conditions of Facebook is also very strong as of the improving margins and the present cash flows. With the same, the 44% of the revenue growth of the company in the fiscal 2015 has increased to more than 50% in fiscal 2016 (Davilla et al. 2015). However, the concerns of privacy had created a serious tension in between the interest of Facebook in fostering free flow of the information and a justifiable interest on the parts of schools, law enforcement, administrators and school officials for protecting the students from the risks of disclosure of the private information in the semi-public realm (Lubian and Esteves 2017). Hence, the quest of Facebook for becoming a leading social interaction website, along with an important tool for business and personal networking for the ones who are connected is continuously hampered by a huge challenge like that of competition from the rivalries, the lawsuits, privacy problems and the need for providing some better interaction services and maintaining its credibility.
However, from the case study it is also clear that people often criticise and have criticised Facebook for its seeming willingness for sharing all the information that users allow. Several users have come to doubt the commitment of Facebook in terms of privacy. There are several issues over privacy and security of the personal details and information on the online sites as there are several people who have profiles both in private and public firms that display their creators’ identities. The reputation of Facebook is hampered by a huge challenge like that of competition from the rivalries, the lawsuits, privacy problems and the need for providing some better interaction services and maintaining its credibility (Lubian and Esteves 2017). It is of no doubt that Facebook has successfully built a successful business by means of helping the people to publish some detailed information regarding their lives. The Facebook Users expect some of these details to become public and at the same time, the others to be held more closely (Miguel and Casado 2015). It is to mention that the adult users of Facebook should be free from publishing the information regarding their lives if they want to do so. However, lately, several users have come to doubt the commitment of Facebook in terms of privacy. There are several issues over privacy and security of the personal details and information on the online sites as there are several people who have profiles both in private and public firms that display their creators’ identities.
In the year 2006, Facebook started challenging the user expectations of privacy by launching “Mini Feed” and “News Feed”. Prior to this launch, the users had to visit the individual profile pages of their friends to see a log of their activities on the Facebook website. The “News Feed” was set as the homepage of all users after they login to Facebook. The response of the users to this was negative (Lo 2018). Majority of the users link this with the privacy issue claiming that very few people wants everyone to automatically know what they update and people always want a little space and privacy, even it is on the Facebook. The use of News Feed as the homepage is just “too creepy and too stalker-esque” and people wanted this feature to go (Lubian and Esteves 2017). Furthermore, in the year 2008, Facebook launched Beacon, the engine that drove the growth and development of the social graph of Facebook. It is to note that Beacon enables the Facebook users to connect their profiles to a total of 44 external partnering websites. It used to collect the data on the user activities on those sites and at the same time, it also published the user activities on the external sites to the News Feeds, all in absence of notifying the users and obtaining their permissions (Kizza 2015). This was a great factor to cause high revolt among the Facebook Users against the company and Mark Zuckerberg apologised for the same. Users rejected this and Facebook shut down the Beacon in the year 2009 as one of the parts of the settlement for successful class action lawsuit.
Again by the end of 2009, Facebook announced a new privacy standard as an alternative and this defaulted the users to share their profile information publicly. However, this again made the users angry as majority of them criticised it has new privacy changes that intended towards pushing them towards sharing their information publicly than even before (Waldman 2015). The “transition tool” that guided the users through the configuration would suggest the setting for sharing the content that they post in the Facebook like their status updates, messages and the wall posts to all the Facebook users or the internet users, despite of having setting the default privacy level limited to the “Your Networks and Friends”.
Furthermore, as Facebook is widely been used in several developed and developing nations, it is therefore focusing on the developing and the emerging ones that still have low rates of internet penetration. For instance, in the case of India, the rate of internet penetration is 35 percent as compared to that of United States that is 89 percent. It is to mention that Facebook seeks for offering free internet in majority of these developing and developed countries by means of the subsidised plans such as Free Basics that works with the local internet carriers for providing the free services that are basic (such as using Facebook) to all the mobile users. However, such services require very high amount of initial investments and Facebook likely hopes for recouping these costs if these new internet users sign up for the social network of its. This is indeed a very clever plan but it needs to be noted that it has raised several red flags among most of the neutrality advocates who opined that “Facebook exerts unfair control over free internet platforms like Free Basics.” These things resulted in the concept or idea of free basics being rejected. However, Facebook still is planning to introduce this service in the other markets in Asia, Middle East and Africa, excluding India as it has been rejected in India already (Duffett 2015). With the same, one of the other negative aspect of this strategy or idea is that it has the possibility of making it difficult for the rival social networks to gather any ground in the market.
It is to mention that Facebook has a big responsibility to keep all its users’ data private and safe. The reputation of Facebook is hampered by a huge challenge like that of competition from the rivalries, the lawsuits, privacy problems and the need for providing some better interaction services and maintaining its credibility. Below are mentioned some alternatives to overcome these issues:
1. There have been several efforts for putting in the “seal programs”, where the logo works towards certifying that a social network has published a policy for privacy and then follows the same (Subtirelu et al. 2019). Notwithstanding this fact, the social networking sites are still very complicated and it could be proved to be tricky in practices for making them following the different policies that were aimed at the banking and the e-commerce sites. Apart from this, another attempt for putting in some or the other kind of the privacy for social networks was the Platform for the P2P (Privacy Preferences Project) set up by the W3 (World Wide Web Consortium). It is actually a framework for the different automated privacy discussions where all the websites such as the social networking discloses all their privacy practices in the Standard machine-readable format such as XML. After then, the website browsers can automatically retrieve the P3P privacy policies and then could compare them with the own privacy preferences of the users.
2. Facebook can introduce a Dating application in order to retain its potential customers from using the other dating applications. It is widely seen that there are increasing number of customers who are using dating apps to interact with different people over internet. This dating app by Facebook would make it easier for the people to find their love and starting some meaningful relationships. In this fields, there are many potential competitors of Facebook like Tinder. In this process, Facebook can also give its users the potential of integrating their posts on their instagram profiles directly into their dating profile and at the same time, the facility or say, the ability of adding their instagram followers to the lists of their Secret Crush along with their total Facebook friends. Today, the more and more number of younger generation are opening their profiles on Tinder like dating apps. This is further distracting the Facebook users from using the Facebook profile and they are tending towards spending more time on surfing these dating apps. This indirectly is costing Facebook a good number of reduction in its user base and ultimately, is leading in fall of its revenue. Opening its own dating app that would be linked with the Facebook profile and their Instagram profile would be a good choice for Facebook to retain its customers and to attract more customers towards it.
3. Facebook should stop the feature of sharing data regarding the religious and political preferences with the third parties and advertisers. This is likely to make it tough for the advertisers to target the people susceptible to the propaganda and fake news. This would also create a hindrance for the “Balkanisation of Society”, which has been decried by the ones like Barack Obama. While the most recently announced verification requirements of the Facebook for the political advertisers are positive and productive development, they might not deter the well-funded state actors who are likely to circumvent the rules and regulations by making use of the local proxies. With the same, it should also limits down the share of details and information with the 3rdparty applications on its platform.
4. Furthermore, Facebook should focus more on spending time listening to the users. Although, it is of no doubt that the company do accepts and realise the fact that it cannot always give in to the growing and changing demands of the users but it should be noted that it also needs to realise that the Facebook users are required to be happy enough with different things that are going on. It is only possible if they start listening to what the users want. It should ensure that users do not need to deal with the complicated privacy settings and at the same time, they can be rest assured about the security provided by Facebook to them while talking with their friends on Facebook and getting socialised.
5. One of the several parts of the reasons for which Facebook is facings issues today is that of its desire for increasing its bottom line by means of advertising (Thorson 2014). It is to mention that Facebook understands that the more open the profile information of the users is, the more likely it is for the users to attract the advertisers from different fields that want to target some specific portions of the user base. Advertising revenue is indeed a significant component in the revenue of Facebook but it to understand that it cannot dedicate all its operation to this field.
It is to conclude from the above analysis is Facebook is indeed a powerhouse as of the fact that it has been conceptualised on its development and growth in the social networks and has evolved its news feed into one of the full-fledged platforms, which the former generation rivals of Facebook such as Twitter and Myspace have failed to attain. Despite of the world-wide great achievement, Facebook is facing some strong challenges like competition from the parts of micro blogging services such as “Twitter”, managing the expectations and needs of the young generation, the tech savvy adopters who demands for more open social interactions, maintenance of the old users who need some selective and limited social realms and radical changes on the home pages of the readers. However, if Facebook strives for widening its moat with some smart investments like making alternative apps like Tinder or dating apps, it could become harder for its potential competitors to beat it in the current market and to keep up with Facebook. It is recommended that Facebook should focus more on controlling the issue of intense competition from its potential market rivalries. Among the hundreds of modern online media websites present on the internet today, the sites like Instagram, LinkedIn and Snapchat are considered to be the direct competitors of Facebook. Twitter is also a key competitor but both serve a different purpose and this is why, risk from Twitter is comparatively less as compared to the above mentioned ones as these social media companies or sites are continuously growing their number of audience and at the same time, expanding their audience reach.
Below is presented an implementation plan for this tactics. Firstly, market assessment needs to be done by means of undertaking surveys and feedbacks and developing some extensive portfolio. Secondly, the company managers and the other experts and responsible persons need to consult about the same with the stakeholders identifying the issues and key takeaways. Furthermore budgeting and assessment of the different capabilities of the organisation is required to be done by the accounts team in the organisation. In this process they should assess the top priorities of the organization while communicating with the accounts department in the organization, developing budgets on the capital expenditure and the ROI and undertaking a cost- benefit analysis for the new project. Thereafter, the HR professionals of the company should invest in recruitment and selection of the technical specialists and training the other existing employees in the organisation. Thereafter, they should develop some blueprints and create the dating application with the help of app and IT developers. Collaboration between the existing and new recruits for empathizing and prototyping the new design of the application is very important in this stage. Finally the dating app should be promoted through different social media platforms such as Instagram, Twitter and YouTube. It would also need to undertake Search Engine Optimization activities for making the application largely available to the communities. Lastly, they shall be monitoring and controlling all the activities while assessing the feedbacks from the different users in forms of reviews while improvising the application as per the concerns and fixing bugs and glitches. The entire process shall be of 27 months.
Goals |
Activities |
Responsible person |
Timeframe |
Rationale |
Market assessment |
Undertaking surveys in the markets with the objective of identifying the recent trends. Assessment of the internal and external environmental factors. Developing extensive customer portfolio reports based on the needs of the end users |
Market analyst |
2- 4 months |
The market assessment would enable the organization in identifying the feasibility of the application in the markets as per the changing tastes and preferences of the customers |
Consultation with the stakeholders |
Undertaking meetings, seminars, open discussions and forums with the different stakeholders with the objective of seeking their viewpoints on the diversification process Issuing newsletters to the stakeholders Grading and prioritizing stakeholder concerns based on the trend analysis |
Managers. Project teams, investors, creditors, shareholders, hierarchy of management |
3 months |
The consultation with the stakeholders would enable the organization in encouraging the active engagement of the stakeholders in the different developmental processes that are planned by the organization |
Budgeting and assessment of capabilities of the organization |
Assessing the top priorities of the organization Communication with the accounts department in the organization Developing budgets on the capital expenditure and the ROI Undertaking a cost- benefit analysis for the new project |
Accounts team in the organization, the hierarchy of management |
1 month |
The budgetary activities would enable the organization in identifying the financial feasibility and benefits that would be earned by the same through the safe implementation of the project as per the needs of the venture. On the other hand, the budgeting would allow the organization in estimating the costs that might be incurred by the venture while introducing the application. |
Recruitment of technical specialists and training of existing employees |
Assessment of the talent based needs of the organization Advertising on different media channels for attracting the attention of technical skills Screening and recruiting IT and app developers from the different sources Raining and developing the skills of the existing staffs to contribute to the new application development process |
Hierarchy of management, HR personnel of the organization, the supervisors from the operational departments |
4- 5 months |
The recruitment of specialist talents would enable the organization in improving the performance of new application development. The organization aimed at recruiting IT and app designer based talents, which will contribute to the continuous operations of the venture. Again, training of the existing employees would allow the organization in reducing the costs of operations while contributing to the effectiveness of the operations of the venture. |
Developing blueprints and creation of the dating application by Facebook |
Collaboration between the existing and new recruits for empathizing and prototyping the new design of the application Developing user interface for the application Finalizing the design of the application Creation of the dating application |
IT and App developers |
4- 6 months |
The development of blueprints and creation of the application would allow the organization in proposing the same to the customers |
Promotion of the dating application |
Promotions through different social media platforms like Twitter, Instagram and YouTube Devising promotional flash ads through different available applications Undertaking Search Engine Optimization activities for making the application largely available to the communities |
Marketing and social advertising agents, SEO practitioner |
6 months |
The social media promotional activities would enable the organization in maximizing the involvement of the community. The utilization of wide range of media vehicles would enable the organization in widening the scope of reaching out to the target audience |
Monitoring and controlling the activities |
Assessing the feedbacks from the different users in forms of reviews Improvising the application as per the concerns and fixing bugs and glitches |
IT and App developers |
3 months |
The monitoring and controlling activities would enable the organization in inducing continuous innovation in the application, correlating to the changing needs of the customers |
Barrigas, H., Barrigas, D., Barata, M., Bernardino, J. and Furtado, P., 2015. Scalability of facebook architecture. In New Contributions in Information Systems and Technologies (pp. 763-772). Springer, Cham.
Davila, A., Foster, G., He, X. and Shimizu, C., 2015. The rise and fall of startups: Creation and destruction of revenue and jobs by young companies. Australian Journal of Management, 40(1), pp.6-35.
Duffett, R.G., 2015. Facebook advertising’s influence on intention-to-purchase and purchase amongst Millennials. Internet Research, 25(4), pp.498-526.
Harper, J.C., Kennett, D. and Reisel, D., 2016. The end of donor anonymity: how genetic testing is likely to drive anonymous gamete donation out of business. Human Reproduction, 31(6), pp.1135-1140.
Kizza, J.M., 2016. Ethical, Privacy, and Security Issues in the online social network ecosystems. In Ethics in Computing (pp. 227-253). Springer, Cham.
Li, X., 2014. The Sarbanes–Oxley act and cross-listed foreign private issuers. Journal of Accounting and Economics, 58(1), pp.21-40.
Lo, F., 2018. Time-Space Analysis of Facebook News Feeds. Stream: Inspiring Critical Thought, 10(2), pp.1-14.
Lubián, F.J.L. and Esteves, J., 2017. The New Digital Economy. In Value in a Digital World (pp. 1-25). Palgrave Macmillan, Cham.
Miguel, J.C. and Casado, M.Á., 2016. GAFAnomy (Google, Amazon, Facebook and Apple): The big four and the b-ecosystem. In Dynamics of Big Internet Industry Groups and Future Trends (pp. 127-148). Springer, Cham.
Montgomery, K.C., 2015. Youth and surveillance in the Facebook era: Policy interventions and social implications. Telecommunications Policy, 39(9), pp.771-786.
Mukerjee, S., 2016. Net neutrality, Facebook, and India’s battle to# SaveTheInternet. Communication and the Public, 1(3), pp.356-361.
Ruehl, C.H. and Ingenhoff, D., 2015. Communication management on social networking sites: Stakeholder motives and usage types of corporate Facebook, Twitter and YouTube pages. Journal of Communication Management, 19(3), pp.288-302.
Subtirelu, N.C., Borowczyk, M., Thorson Hernández, R. and Venezia, F., 2019. Recognizing Whose Bilingualism? A Critical Policy Analysis of the Seal of Biliteracy. The Modern Language Journal, 103(2), pp.371-390.
Thorson, K., 2014. Facing an uncertain reception: Young citizens and political interaction on Facebook. Information, Communication & Society, 17(2), pp.203-216.
Turban, E., King, D., Lee, J.K., Liang, T.P. and Turban, D.C., 2015. E-commerce: mechanisms, platforms, and tools. In Electronic Commerce (pp. 51-99). Springer, Cham.
Waldman, A.E., 2016. Privacy, Sharing, and Trust: The Facebook Study. Case W. Res. L. Rev., 67, p.193.
To export a reference to this article please select a referencing stye below:
My Assignment Help. (2022). Accounting Principles II. Retrieved from https://myassignment.live/free-samples/acct2023-accounting-principles-ii/financial-statements-of-the-business-file-A1D39FE.html.
"Accounting Principles II." My Assignment Help, 2022, https://myassignment.live/free-samples/acct2023-accounting-principles-ii/financial-statements-of-the-business-file-A1D39FE.html.
My Assignment Help (2022) Accounting Principles II [Online]. Available from: https://myassignment.live/free-samples/acct2023-accounting-principles-ii/financial-statements-of-the-business-file-A1D39FE.html
[Accessed 06 September 2022].
My Assignment Help. 'Accounting Principles II' (My Assignment Help, 2022) < https://myassignment.live/free-samples/acct2023-accounting-principles-ii/financial-statements-of-the-business-file-A1D39FE.html> accessed 06 September 2022.
My Assignment Help. Accounting Principles II [Internet]. My Assignment Help. 2022 [cited 06 September 2022]. Available from: https://myassignment.live/free-samples/acct2023-accounting-principles-ii/financial-statements-of-the-business-file-A1D39FE.html.
Are you confident that you will achieve the grade?
Our best Expert will help you improve your grade
If you are the original writer of this content and no longer wish to have your work published on Myassignment.live then please raise the content removal request.