...Top 10 Facebook Threats ever...
1) People stop using Facebook : Well this is the very obvious threat, in any case if the people stop to use the facebook due to some reasons. Facebook states "A decrease in user retention, growth, or engagement could render Facebook less attractive to developers and advertisers, which may have a material and adverse impact on our revenue, business, financial condition, and results of operations".
Although annual revenue grew 154% between 2009/2010 and 88% between 2010/2011, it relied on user growth that will eventually have to slow due to higher market penetration rates, which is economic-speak for "we're running out of people."
2) Advertisers run away : Ad's being a major part of the income, the S-1 doc has some states like: "In 2009, 2010, and 2011, advertising accounted for 98%, 95%, and 85%, respectively, of our revenue."
This figure suggest 9 that the client might have been expecting a lot more from Facebook.
3) Facebook runs out of ideas for monetizing the Facebook platform : The(Facebook) say : "We currently monetize the Facebook Platform in several ways, including ads on pages generated by apps on Facebook, direct advertising on Facebook purchased by Platform developers to drive traffic to their apps and websites, and fees from our Platform developers' use of our Payments infrastructure to sell virtual and digital goods to users. Apps built by developers of social games, particularly Zynga, are currently responsible for substantially all of our revenue derived from Payments."
4) Foriegn "Facebooks" eat Facebook's lunch overseas: With a big figure like 800 millions of users Facebook considers itself as one of the largest kingdom in the cyberworld. Well the culturel differencein many countries did not seem to have affected the popularity of it. But if the regional social networking sites come up with the extra features which suit the huge mass, then it might affect Facebooks
popularity and usage.
5) Google eats Facebook's lunch : Google already dominates search, has hundreds of millions of peaple signed up on a social media network, and owns a big part of smart phone market.
Facebook says : "Certain competitors, including Google, could use strong or dominant positions in one or more markets to gain competitive advantage against us in areas where we operate including: by integrating competing social networking platforms or features into products they control such as search engines, web browsers, or mobile device operating systems; by making acquisitions; or by making access to Facebook more difficult."
6) Facebook looses a top knight or hires too many soldiers : Facebook says "We cannot assure you that we will effectively manage our growth," the IPO states, noting that its workers have grown from from 2,127 at the end of 2010 to 3,200 on December 31, 2011. The document also notes that the departure of COO Sheryl Sandberg could hurt the company's momentum. Sandberg's value to the company is made apparent in her salary: $31 million last year.
7) Facebook's reputation suffers : Privacy concern in Facebook's history is as long as history of Facebook itself. After all, this is a company whose business model relies on collecting and selling disaggregated user data to advertisers. Zuckerberg is aware of the risk this poses to both to users and advertisers: "Maintaining and enhancing our brand will depend largely on our ability to continue to provide useful, reliable, trustworthy, and innovative products, which we may not do successfully. We may introduce new products or terms of service that users do not like, which may negatively affect our brand. Additionally, the actions of our Platform developers may affect our brand if users do not have a positive experience using third-party apps and websites integrated with Facebook."
8) Governments pose a problem: Facebook is an international business operating internationally with fluctuating politics and concepts of privacy and online rights(look at SOPA). One of the problem is tax laws, comlex regulations and protocols might change and "could result in claims, changes to our business practices, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business".
9) Zynga goes away : This might have been the most interesting paragraph of the Facebook IPO: "In 2011, Zynga accounted for approximately 12% of our revenue, which amount was comprised of revenue derived from payments processing fees related to Zynga's sales of virtual goods and from direct advertising purchased by Zynga. Additionally, Zynga's apps generate a significant number of pages on which we display ads from other advertisers. If the use of Zynga games on our Platform declines, if Zynga launches games on or migrates games to competing platforms, or if we fail to maintain good relations with Zynga, we may lose Zynga as a significant Platform developer and our financial results may be adversely affected."
10) Tech is fickle : Dynasties come and go in months or years, rather than decades, and one year's darling is rarely the next decade's dominator. Compare the fortunes of Apple (hot, then dead, then the world's biggest company) and Microsoft (the world's biggest company, then static, then, maybe, hot again). - See more at: http://www.alltrickbyte.com/2013/09/top-10-facebook-threats-ever.html#sthash.YoaFJ4YB.dpuf
1) People stop using Facebook : Well this is the very obvious threat, in any case if the people stop to use the facebook due to some reasons. Facebook states "A decrease in user retention, growth, or engagement could render Facebook less attractive to developers and advertisers, which may have a material and adverse impact on our revenue, business, financial condition, and results of operations".
Although annual revenue grew 154% between 2009/2010 and 88% between 2010/2011, it relied on user growth that will eventually have to slow due to higher market penetration rates, which is economic-speak for "we're running out of people."
2) Advertisers run away : Ad's being a major part of the income, the S-1 doc has some states like: "In 2009, 2010, and 2011, advertising accounted for 98%, 95%, and 85%, respectively, of our revenue."
This figure suggest 9 that the client might have been expecting a lot more from Facebook.
3) Facebook runs out of ideas for monetizing the Facebook platform : The(Facebook) say : "We currently monetize the Facebook Platform in several ways, including ads on pages generated by apps on Facebook, direct advertising on Facebook purchased by Platform developers to drive traffic to their apps and websites, and fees from our Platform developers' use of our Payments infrastructure to sell virtual and digital goods to users. Apps built by developers of social games, particularly Zynga, are currently responsible for substantially all of our revenue derived from Payments."
4) Foriegn "Facebooks" eat Facebook's lunch overseas: With a big figure like 800 millions of users Facebook considers itself as one of the largest kingdom in the cyberworld. Well the culturel differencein many countries did not seem to have affected the popularity of it. But if the regional social networking sites come up with the extra features which suit the huge mass, then it might affect Facebooks
popularity and usage.
5) Google eats Facebook's lunch : Google already dominates search, has hundreds of millions of peaple signed up on a social media network, and owns a big part of smart phone market.
Facebook says : "Certain competitors, including Google, could use strong or dominant positions in one or more markets to gain competitive advantage against us in areas where we operate including: by integrating competing social networking platforms or features into products they control such as search engines, web browsers, or mobile device operating systems; by making acquisitions; or by making access to Facebook more difficult."
6) Facebook looses a top knight or hires too many soldiers : Facebook says "We cannot assure you that we will effectively manage our growth," the IPO states, noting that its workers have grown from from 2,127 at the end of 2010 to 3,200 on December 31, 2011. The document also notes that the departure of COO Sheryl Sandberg could hurt the company's momentum. Sandberg's value to the company is made apparent in her salary: $31 million last year.
7) Facebook's reputation suffers : Privacy concern in Facebook's history is as long as history of Facebook itself. After all, this is a company whose business model relies on collecting and selling disaggregated user data to advertisers. Zuckerberg is aware of the risk this poses to both to users and advertisers: "Maintaining and enhancing our brand will depend largely on our ability to continue to provide useful, reliable, trustworthy, and innovative products, which we may not do successfully. We may introduce new products or terms of service that users do not like, which may negatively affect our brand. Additionally, the actions of our Platform developers may affect our brand if users do not have a positive experience using third-party apps and websites integrated with Facebook."
8) Governments pose a problem: Facebook is an international business operating internationally with fluctuating politics and concepts of privacy and online rights(look at SOPA). One of the problem is tax laws, comlex regulations and protocols might change and "could result in claims, changes to our business practices, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business".
9) Zynga goes away : This might have been the most interesting paragraph of the Facebook IPO: "In 2011, Zynga accounted for approximately 12% of our revenue, which amount was comprised of revenue derived from payments processing fees related to Zynga's sales of virtual goods and from direct advertising purchased by Zynga. Additionally, Zynga's apps generate a significant number of pages on which we display ads from other advertisers. If the use of Zynga games on our Platform declines, if Zynga launches games on or migrates games to competing platforms, or if we fail to maintain good relations with Zynga, we may lose Zynga as a significant Platform developer and our financial results may be adversely affected."
10) Tech is fickle : Dynasties come and go in months or years, rather than decades, and one year's darling is rarely the next decade's dominator. Compare the fortunes of Apple (hot, then dead, then the world's biggest company) and Microsoft (the world's biggest company, then static, then, maybe, hot again). - See more at: http://www.alltrickbyte.com/2013/09/top-10-facebook-threats-ever.html#sthash.YoaFJ4YB.dpuf
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