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#CASESTUDY2

FACEBOOK

1. What sparked the founding of Facebook? Who was involved and what
motivated them?

Facebook. Invented by Harvard computer science student Mark Zuckerberg, along with
classmates Eduardo Saverin worked on business, Dustin Moskovitz as a programmer,
Andrew McCollum as a graphic artist, and Chris Hughes.

The website was originally and briefly called Facemash.

Second year student, when he created the Facemash website. His sense of humor led him
to create the site as a type of "hot or not" game for Harvard students.

Hacked into Harvard's security network and where he copied the student ID images used
by the dormitories and used them to populate his Facemash website.

2. What challenges did the founders overcome to build the business?

Facemash shut down by Harvard execs.

Mark Zuckerberg faced charges of breach of security, violating copyrights, and violating
individual privacy for stealing the student photos he used to populate the site.

He also faced expulsion from Harvard University for his actions. However, all charges
were eventually dropped.

Mark Zuckerberg relaunched with a new website "The Facebook".

2. What challenges did the founders overcome to build the business?

Six days later, Mark Zuckerberg faced trouble when three Harvard seniors, Cameron
Winklevoss, Tyler Winklevoss, and Divya Narendra, accused Zuckerberg of stealing their
ideas called Harvard Connection and using it for The Facebook.

Winklevoss, Winklevoss, and Narendra later filed a lawsuit against Zuckerberg however,
the matter was settled out of court.

3. What makes Facebook Stand-out? What is Facebooks competitive


advantages compared to other social networking providers.

User Friendly Nature

Better interface

Source of information

Entertainment

Sharing Options

No Adult Content

Top notch Security

4. What do you think is Facebook most remarkable asset? Could it be


pioneer thinking, a new way of doing businesses, a new technology,
product or services?
Remarkable asset.
Facebook is the site for starting the business.
The platform (F8) of developing a new application.
Experienced employees from the big companies.
More investors to Facebook.
Pioneer thinking.
Launching more new features.
Connecting people's.
Platform for third party application.

4. What do you think is Facebook most remarkable asset? Could it be


pioneer thinking, a new way of doing businesses, a new technology,
product or services?
New

technology
Partnership with Skype to provide a video / voice calling.
Introduce an mobile application Facebook.
Allow third party launched with Facebook.

Product or services
Messenger, people can chat among their friends in their Facebook account.
fbFunds, the successful investors provides a fund to aspire application developers.
Page Manager, product that offer business partner like advertisers.

5. What makes Facebook an attractive opportunity for investment?

Facebook is the operating system for people's lives

Facebook continues to overcome mistakes

Facebook is phenomenally profitable

6. Identify the Facebook major risks in each of these categories:


technology, market, team, and financial. Rank orders them.
Team

Fail to assemble a team of highly skilled engineers and computer scientists


whose expertise spans a broad range of technical areas.

Financial

Fail to retain existing users or add new users.

if level of engagement with Facebook decreases , financial results, and


business may be significantly harmed.

Facebook generate a substantial majority of revenue from advertising. The


loss of advertisers, or reduction in spending by advertisers with Facebook,
could seriously harm the business.

6. Identify the Facebook major risks in each of these categories:


technology, market, team, and financial. Rank orders them.
Market

The market price of common stock may be volatile or may decline, and they may not be
able to resell their shares at or above the initial public offering price.

Substantial blocks of total outstanding shares may be sold into the market as lock-up
periods end, as further described in Shares Eligible for Future Sale. If there are
substantial sales of shares of common stock, the price of common stock could decline.

Technology

Missing the Boat on Mobile fail to steals attention and hearts of users.

Facebook user growth and engagement on mobile devices depend upon effective
operation with mobile operating systems, networks, and standards that they fail to
control.

May not be successful in grow and further monetize the Facebook Platform.

7. Create a SWOT analysis for Facebook.


STRENGTH

One of the top and leading social networking sites


User friendly
By January 2011, Facebook comprised 600 million users around the world
WEAKNESS

Privacy Issues
Innovative steps changing in the look of Facebook that user face while operating. - bug.
Average load time are slow

7. Create a SWOT analysis for Facebook.


OPPORTUNITY

Improve privacy structure


Social networking site using a cell phone
User can share their important information through Facebook

THREATS

Facebook is not technically competent to be trusted


Facebook makes it incredibly difficult to truly delete user account
Facebook is a bully

8. Create the Six Forces Model of Facebook.


A strategic business tool that helps businesses evaluate the competitiveness and attractiveness
of a market. The six force model provides an industry-view and analyzes six key areas:

Competition Information regarding present competition

New Entrants Information regarding the ease with which new competition could enter
the market

End Users/ Buyers Information regarding the buyers abilities to affect price

Suppliers The number and type of sellers

Substitutes The ease by which a product or service can be substituted

Complementary Products The impact of related products and services already in the
market

8. Create the Six Forces Model of Facebook.

Competitors
The competitors for Facebook currently are from Google. On November 2007, Google
founded the OpenSocial which also an application platform . Soon after, Yahoo and
MySpace joined Google to jointly foster the development of OpenSocial.

New entrants
The threat of new entrants who want to enter the social network is very low. As the
Facebook is the biggest social networking site with 200 million people access Facebook
via a mobile each day and it will be difficult for the new entrants social networking site
to get to a place where Facebook has reached.

8. Create the Six Forces Model of Facebook.

End users/buyers
For Facebook, the advertiser and the users are their customer. The advertiser is the on
paying Facebook to use the platform. In February 2011, the Wall Street Journal reported
that in two years Facebooks share of online display ads surged to 13.6 percent from 2.9
percent of the US market which reached $88.8 billion in 2010. Moreover, by users clicking
the like they allow other users to share with their Facebook friends on a company or
product that they which increase in advertising effectiveness.

Suppliers
By January 2011, Facebook comprised some 600 million users around the world.
Facebook features such as the likes, interest, preferences and recommendations shows
the precise information about the users.

8. Create the Six Forces Model of Facebook.

Substitutes
The threat of substitutes is moderate. Other social network such as MySpace, Friendster,
Beyond Orkut, RenRen, CyWorld and Twitter which is very similar to Facebook can be a
threat. However, several of these networks can only be used by the population of their
origin countries unlike Facebook which has users all over the world and thus been the
largest social network.

Complementary Products
The impact of Facebook and services already in the market spread quickly. Others social
network such as MySpace and Friendster are hurting as many users are switching to
Facebook which makes Facebook the largest social network nowadays.

THE END

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