2012: Mixed Fortunes for Facebook

We thought we would let the newest member of the team, Tom, loose on the blog this week. Here’s his take on Facebook in 2012:

Facebook is the symbol of social media. Its founder, Mark Zuckerberg, has firmly entered the public consciousness following the success of 2010’s quasi-biographical film, The Social Network. Much is made of the company’s meteoric rise, which has made the lack of a Facebook profile a cultural taboo and earned Zuckerberg a place as the youngest billionaire in the world. Following the company’s disastrous IPO, observers have noted that its development is being used as a barometer by investors seeking to judge the continued viability of social media companies.

Facebook has taken the initiative, though. Aware that the pathetic demand for its stock was driven by a lack of faith in its ability to attract advertising and other commercial revenues as more and more users turn to mobile devices, the company quickly sought to refine its platform to allow for easier commercial usage. For starters, American users logging in from their phone will now see an opportunity to send friends gifts as Facebook integrates its birthday reminder feature with an e-commerce element. The site is also now offering businesses the opportunity to sponsor search results, allowing them to boost their app or page above their competitors’. The most important innovation, though, is the new dedicated mobile advertising network. This major development means that mobile ads will now be targeted to users in the same way as the regular Facebook ad service is – that is, by using information drawn from the user’s profile, including their bio, ‘likes’ and chosen apps. Though in its infancy, this change is already making its presence felt, as the company’s third quarter earnings revealed a 32% growth in revenue compared to the same period last year. This is extremely impressive, especially given that the new ad network has only just been rolled out and so we cannot expect to see the full results until the end of the next quarter. The market was obviously pleased; Facebook’s shares shot up by 10% following the earnings report.

Social Media Heading into 2013

Assuming that these measures are a success in the long term, and investors begin to see greater and more stable returns, we can expect to see more excitement around social media platforms in general as commercial entities. The exposure of Facebook to the forces of the market was a risk, and one which some people thought had been miscalculated. If those people are proven wrong, it could be that others in the sector also open their companies up with a public offering. This change would fundamentally alter the course of the web’s development, as social media sites would become accountable to shareholders as well as users. The potential of the internet as a catalyst of economic growth is just beginning to be realised. Interested parties would do well to keep tabs on the market leader’s progress.

Social Media Management

If you’re not on Facebook yet, what are you waiting for? With hundreds of millions of users, it’s a great way to get into contact with potential customers. We can help you manage your social media to make sure that you see the biggest increase in customer engagement, website traffic and sales. Just give us a call or pop us an email – we don’t bite!


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