Facebook Submitted by

Section F Group 10
Apurva J Salvi (2016PGP075)
Chatla Prasanth Kumar (2016PGP100)
Kajal Modi (2016PGP162)
Mathan Kumar V (2016PGP207)
Patel Krupal Arvindbhai (2016PGP261)
Pooja Thakur (2016PGP267)
Suprito Biswas (2016PGP395)
Vasantada Srikanth (2016PGP423)
Overview
Facebook was Launched in Feb 2004 by Mark Zuckerberg as Harvard
University's private student network
Business model:
85% of its revenue came from advertising
Remaining 15% came from sales of virtual goods by third-party
developers
Privacy Problem
In Dec 2009, Facebook changed the privacy policy that if users forget to
set up their privacy option page, then their information will disclose to
the public.
Only 20% of users know about privacy options
It targets all types of internet users
Threat of competitors: Google, Twitter, Snapchat
Problems
Declining Revenues
General Motors, the third largest online advertiser in the US, pulled the
entirety of its paid advertising from Facebook.
They felt that FB has had little impact on their customers' car purchasing
decisions.
Biggest issue is that Facebook has a very closed-in environment with limited
support for brands and limited consideration for needs of brands.

Solutions
Do Nothing
Invest more to develop new advertising products
Invest further in the Platform and help companies develop their own
applications
1. Do Nothing
Pro:
No risk involved
No R&D Spending is required
No additional overhead

Con:
ad revenue loss
Decreasing stock prices
Loss of users to competitors

2. Invest more to develop new advertising products

Pro:
New products would bring more revenue
Profitability leads to higher stock prices
 Con:
Users lost interest due to interference
Exhausted current ad products
Loss of users

3. Invest further in the Platform and help companies develop

their own applications
Pro:
Increased user experience. (Updates on location, activity, etc.)
More potential target groups
Expansion can offset decreasing stock prices
Con:
Reduction in revenue will continue
Increased spending on marketing and R&D
Solution
Facebook should invest further in the platform and help companies develop
their own application, thereby tapping into new markets
Expanding to potential markets would lead to greater upside in profitability

How
Facebook should develop new products and applications to target travel,
media, sports, and financial markets
Create better and more focused user experience
Update privacy controls for users
Outcome
New markets will create more advertising opportunities
Potential market growth would be higher
Facebook would have additional competitive advantages in new
industries