Three Keys for Facebook’s Longevity
It’s no secret that technology has changed the pace of our world; it seems everyone today walks around, head down, looking at their smartphones, constantly connected to email and checking their social network status. Tech is also a major driver of our economy, and related IPOs generate massive dollars and buzz. It can be a struggle for companies to keep up with the fast pace with so many under the gun to perform.
Facebook has managed to continually grow over the past eight years, has amassed nearly one billion users to date, and is clearly the fan favorite when it comes to social media. However, many analysts and consumers alike wonder if the site has what it takes to survive and stay relevant for its consumers for the next eight years. There is no question that Facebook has a lot going in its favor, but there is still much more to gain over time.
Here are my thoughts on how the company can not only stay relevant, but continue to thrive in both the consumer and investment communities.
1. Rely on Mobile
The number of mobile users continues to grow steadily, and Facebook needs to solidify its place as a leader in the space in order to maintain – and grow – its current member base. There is certainly proof that consumers love using Facebook on the go, as Zuckerberg reported at TechCrunch Disrupt that the platform’s mobile users are more than twice as likely than web users to use Facebook more than seven times a day. And, he stated that there has been twice the number of daily news feed items since the recent mobile update made the app work faster. Mobile is definitely the way to capture enthusiastic users, which is key to Facebook’s continued success.
While much has been discussed about the real value of mobile advertising, Facebook is in an important position, as they can test new ways to include advertising on their popular mobile platform. One advantage Facebook has over other mobile companies pushing ads is their ability to accurately target consumers with ads that best fit their lifestyle based on initial and ongoing user data collected. The site is known for testing and tweaking, and I expect we’ll see new ways of advertising from Facebook, whether it’s ads in news feeds, paid brand fan pages or even new ways to redeem offers directly through the platform.
2. Create New Revenue Streams
Advertising accounts for almost all of Facebook’s total revenue, but that may not be enough to stay afloat, as we’ve seen in the world of traditional advertising that an online advertising model on its own has not proven to be the holy grail. In order for Facebook to continually grow and prosper, the business is going to have to determine new ways to bring in additional revenue, as it’s essential to keep the core services of Facebook free. However, Facebook offers services that are incredibly valuable to consumers and, in some ways, they are undervaluing their offer. From totally free brand pages to social applications that users love but that take them outside of the platform, many will argue that the Facebook could be building a very valuable freemium business model now.
Facebook is rumored to be working on a search offering, which could be shaped into a question and answer format. While search may not be the right service to monetize, Facebook should start looking at new technical developments as revenue streams. By putting limitations on some existing services, such as Instagram, which they are still folding into the platform, and giving users a chance to vote for valued services with their wallets, Facebook would find solid new revenue streams, which would also make shareholders happy.
3. Listen, But Stay on Track
When companies have a large member base, it’s important that executives listen and get to know their audience. All companies can benefit from taking a minute to learn from users what they want and what works best for them so it can be applied to business processes and plans within reason. Facebook is known for its decisions to completely change the site overnight with no big alerts or advance notice to the people that are logging on daily. Newness is always a plus to keep people engaged and entertained, but completely changing the concept of something that may be unwarranted is never good for public admiration. Finding a balance of moving ahead while letting members know they are a valuable part of the community will also help drive Facebook’s continued success.
No one knows exactly what the future holds for Facebook or what new sites may come along down the road that could pose a challenge to the social giant. As with leaders in any industry, there will always be those that cast doubt but I think we can all rest assured that Facebook will see continued success. By addressing some key areas of focus, Facebook will definitely be around for years to come.