Facebook Turns 10

February 4, 2014

Happy Birthday Facebook

So Facebook is celebrating its 10th birthday. The last few years for Facebook have been complicated to say the least.

I remember that age. I found it complicated too. Some nasty truths of life began to surface… 

1)      Things don’t stay the same for very long

Social networks become winners when they provide a type and style of communication which fits a previously unfulfilled consumer need. Sounds simple, but we’ve seen, from the outright failure or eventual demise of various platforms, that this is extremely difficult to get right, and maintain in the long run. Facebook has been the dominant force in the social media world for a long time, but in 2012/2013, the competition began to get real.

Twitter is the world’s second most famous social network, and while it competes with Facebook, it actually fulfils quite a different need. Because of this, the two platforms can coexist quite peacefully. The emergence of apps like Snapchat and Whatsapp are the real threat to Facebook. Whatsapp in particular provides seamless group chat functionality which is a real menace to Facebook territory. 

2)      People have to make money

It’s no coincidence that the biggest challengers to Facebook have app and not desktop based offerings, nor is it a secret that Facebook have struggled to crack their mobile offering.  This area has now become the clear priority for the company, and recent figures are really positive; it seems they’ve now created a model that works for advertisers and consumers alike. In Q4 2013, mobile ad consumption grew by 53%, and mobile ad revenues grew by 76%, to $2.34bn. The impact of these enormously positive figures can’t be underestimated.

3)      Dad is not all-powerful

If we look back to summer 2012 and Facebook’s entry to the stock market, we remember an embarrassing time for the company. The period of time immediately following the IPO was deemed a disaster and a fiasco; shares took 14 months to recover to their $38 IPO price. The financial technicalities which lead to this are complex and there is plenty blame goes around. That said, a number of analysts put the blame squarely with Facebook’s founder and leader, Mark Zuckerberg. Reports quickly emerged blaming his idealism, lack of experience and ego for the company’s poor performance.

4)      People are unpredictable

Of course, problems at Facebook don’t begin and end in the financial pages. Ironically, the social responsibility of the company is the issue creating most headlines. Facebook is often accused as a facilitator of the harmful behaviours of its users. As a result, Facebook is slowly becoming more and more involved in policing content on its network.  Over the past week they have come under attack again, this time accused of being complicit in the ‘neck nomination’ phenomenon. A Facebook spokeperson told the Irish Independent that “We do not tolerate content which is directly harmful, for example bullying, but controversial or offensive behaviour is not necessarily against our rules.” Because of its lack of clarity, the sustainability of this position seems questionable. Can of worms though it is; it seems this policy will have to be tightened.

Complicated times for the 10 year old company.  Is Facebook too big to fail? Really…who knows?

There is a remarkable lack of history to reference here. One thing is for sure; the low barriers to entry in the social media market mean that companies are fundamentally more vulnerable to competition than brick & mortar companies. To now, social networks seem to have had a lifespan; once the user experience became the norm, people moved on to the new.

Facebook’s vision is what has made it great so far. The most recent earnings report of Jan 31st 2014 pushed the share price to a record $62.57. The very fact that Facebook has taken a dip and recovered, reinventing itself as a ‘mobile first’ company and making money doing it, makes me think that they have everything they need to survive changing tides. 



One Response to “Facebook Turns 10”

  1. Louise Enright said

    Great post Claire!


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