Executive Summary The following report is based on the case study ‘facebook dilemma’. Facebook offers various ways for its users to interact. Facebook is a social network service that allows its users to create a profile and join various types of self-contained networks such as colleges and universities. Facebook is an internet born company that uses web 2. 0 technologies. This report outlines the communication concept used by facebook. It also states how e-commerce and web 2. 0 technologies made facebook popular by allowing advertisers to target their audiences through facebook.
In facebook businesses can place advertisements that are fully integrated into primary features of the site, such as news feed which is a continually updating list of news stories, about member’s friend’s activities on facebook. The report also covers the weaknesses of facebook’s privacy policies and features and what management, organisation, and technology factors contributed to those weaknesses. It states how the launch of beacon services, effected facebook. The report also explains briefly the communication model of facebook. Introduction Facebook is king of the social networking sites.
Prior to its inception in 2004, Myspace had ruled the internet as the premier place for people to meet and interact on the World Wide Web. However, in 2004 Facebook completely changed how social network is to operate, and they have become the most popular social destination on the Web. Popularity is great, but a company still has to be able to pay their bills and have some profit left over. Despite their success, Facebook has had a difficult time becoming profitable. Over the years they have tried many times to get over the hump in profitability.
The purpose of this paper is to answer specific questions pertaining to Facebook and their attempts to build their profit. Q1. What communication concepts are illustrated in this case? The communication concept that is illustrated in the case study ‘Facebook Dilemma’ is that facebook is a internet born company (i. e. E-commerce). Facebook offers various ways for its users to interact. It has got over 118 million worldwide users. Facebook is a social network service that allows its users to create a profile and join various types of self-contained etworks such as colleges (Riva, R 2008). E-commerce is the use of the internet and the Web to conduct business. A social network such as facebook is an online site that focuses on building and reflecting of social networks or social relations among people. Facebook, not just only uses e-commerce to conduct business but goes a little deeper because it involves the concepts that are part of the basic construct of e-commerce. Communications in a social network service is mainly done through discussion groups, messaging, chat rooms, email videos, blogging and file sharing (Joseph, V 2010). Facebook site includes a wide variety of array tools that allow users to connect and interact with other users including messaging, groups, photo sharing and user created applications” (Riva, R 2008). Facebook involves richness, interactivity, information density, & personalization/customization Richness is the complexity and content of a message. Interactivity is how e-commerce allows for two-way communication. Information density is the total amount and quality of the information available to all market participants, consumers, and merchants.
Finally, personalization/customization is how merchants can target their messages to specific individuals to promote their products. Facebook represents opportunities for the advertisers to reach highly targeted audiences based on the user’s selection for the criteria’s such as hobbies, preference, regions and many more criteria and all this is done in the comfort of the user’s home. Business has the opportunity to advertise on facebook, the website is fully integrated with the advertisement, some examples of this, is Newsfeed which tells the company about the user’s friend’s activities (Riva, R 2008).
Big brands and companies target their customers through facebook by offering them some kind of deals. As facebook as got more than 118 million worldwide users, it is a great platform for the businesses to advertise and reach their customers in every corner of the world. Facebook’s failed attempt to utilize Beacon marketing software to promote sales and purchases of their constituents. Beacon was a program that would communicate what was purchased to Facebook members’ friends in order to entice them to shop their site (Riva, R 2008). Q2. What is the role of e-commerce and Web 2. technologies in Facebook’s widespread popularity? In the early days, business communication was largely defined by a publishing or broadcasting mindset. Externally, a company released carefully scripted messages to a mass audience that often had few, if any, ways to respond. Likewise customers and other interested parties had few ways to connect with one another to ask questions, share information, or offer support. Internally communication tended to follow the same “we talk you listen” model, with upper managers issuing activities to lower level supervisors and employees (Joseph, V 2010).
One of the main factors of facebook popularity, is due to e-commerce and web 2. 0 technologies. “Facebook is a great tool for advertisers to reach highly targeted audiences based on their demographic information, hobbies and personal preferences, geographical regions and other narrowly specified criteria in a comfortable and engaging environment” (Riva, R 2008). Web 2. 0 can be described as a trend that revolves around using interactive, community-driven sites to promote the sharing of information, networking and other forms of collaboration among users. In a web 2. environment customers are able to interact with the business and actually play a significant role in the company’s success. This new way of web interaction is quickly replacing the dull static websites of past times. These days user can interact with the website content and get involved in ways that were not possible before. Facebook is a great example of web 2. 0 technologies. In facebook businesses can place advertisements that are fully integrated into primary features of the site, such as news feed which is a continually updating list of news stories about member’s friend’s activities on facebook.
Firms can also create facebook pages where users can learn more about and interact with their companies. For example restaurants can advertise by having facebook, placing items in the news feed of its customers indicating that those people ate there recently. “Blockbuster has recent rentals and reviews of its movies appearing in similar fashion. Many companies, including eBay, Sony pictures, The New York Times and Verizon maintain facebook pages where users can learn more about the company and its product“(Riva, R 2008).
Facebook is popular because it promotes social interaction, and it is the interactivity that is the basis for e-commerce. Consumers can meet their friends and do business. Facebook is like a gold mine for most advertisers because the site has gathered a huge amount of information and also because of the richness of the social networking environment. Facebook has also benefited from its status as first mover in the social networking market place, amassing a large audience who’s user don’t want to live facebook as they fear to leave there friends behind (Riva, R 2008) Q3.
Describe the weaknesses of Facebook’s privacy policies and features. What management, organization, and technology factors have contributed to those weaknesses? Facebook’s policies are not weak, but they have made weak decisions that have damaged their security credibility. Their weakness stems from the introduction of Beacon, the mishandling of News Feed, and the inefficient methods of deleting an account. Beacon was programming that shared users’ purchase information with their friends automatically. Beacon was intended to inform users when their friends made purchases and engaged in other activities outside facebook.
The trouble with the service was that it shared information about the users they had not explicitly agreed to share (Riva, R 2008). Beacon was initially an opt-out program. If the user did not want the service, they had to manually turn it off. Beacon service was still sending information to facebook, even if the users opt-out. Many protest groups were created against beacon. “The civic action group moveOn. org created a facebook group to protest beacon and grew to over 50,000 members in 10 days” (Riva, R 2008). The Beacon program caused Coca-Cola and Overstock. om to pull their advertising and support away from Facebook. The launched and subsequent embarrassment of facebook damaged facebook’s reputation as a provider of safe, secure environment for its users. News Feed is another program that was abruptly introduced to the Facebook users that shares actions with everyone on the Facebook Web. News feed is a feature which provides updates to your friends when you perform actions via facebook, such as updating your profile, adding new friends, or adding new applications (Riva, R 2008).
Facebook CEO Zuckerburg had to publicly apologize and explain to the users about News Feed to usurp a possible firestorm. Facebook has also come under the fire for its handling of the personal information of people who attempt to remove their profiles from the site (Riva, R 2008). Thought users were allowed to deactivate their account, the company’s servers still kept their data, in order to make reactivation process easier. All three areas that involved personal information and privacy were met with resistance.
A lack of interaction with their users is what led to the weakness in their policies and procedures. Each action was not formally presented and outlined by the company. In each instance, they only fixed the problem after damage had occurred. Ultimately, it was their faulty decision making process, which lead to the weakness in their privacy policies. Q4. Does Facebook have a viable business communication model? Explain your answer. Facebook did not always have a viable communication model, but now they have one that could be successful.
Facebook is following a trend that has been benchmarked by the Iphone and IPod markets by creating applications that compliment the base program. In May 2007, Facebook introduced Facebook Platform, which is an effort to open up its site to third-party developers to become a platform for their applications (Riva, R 2008). Facebook platform has been beneficial for both facebook as well as the developers who are creating applications for it. Facebook’s environment has become even more engaging and self-sufficient, and developers gained unparallel exposures for their applications.
A small percentage of these applications have turned into viable businesses. Companies attracting large number of users to their applications on facebook are able to sell goods, services, or advertising (Riva, R 2008). This is a perfect marriage between developers and Facebook because the developers want exposure for their technology and products, while Facebook has network of over 118 million potential clients of the developers. As a result, the site is more engaging, and more innovative than ever before.
Moreover, in March 2008, Facebook launched new privacy protocols that placed more control of privacy content in the hands of the users (Riva, R 2008). Users control who has access to the site, and what information the visitors will have a chance to view. Facebook’s growth has led Microsoft to purchase a stake in the company, buying 1. 6% of the company for $246 million (Riva, R 2008). Due to the above factors facebook’s value is increased to $15 billion. With all of their good news, it is imperative for Facebook to drive innovative application creation, and vigilantly protect the privacies of their users.
Q5. If you were responsible for coordinating Facebook’s advertising, how would you balance the desire to become increasingly profitable with the need to protect the privacy of your users? In terms of advertising, I know that I have the advantage at the negotiating table because I have a large treasure of potential customers. A large number of users use facebook on daily basis. The only reason why I have a large number of users is because they trust me to protect their privacy so they can interact at their own discretion.
Consequently, my users give me my power position, and so their privacy will never be breached. However, I will allow the vendors to present their goods and services by selling advertisement space on the site. My site has over 118 million people who can see their advertisement and click the link to get more information, or make a purchase. To be the number one site on the internet, I have to protect the users who built my name, reputation, and business. I think another best way to make profitable advertisement with protecting user’s privacy is opt-in policy.
When users make account in Facebook, give them the choice whether accepting advertisement or not. If there is no benefit to customer, there is nobody to accept the advertisement. Therefore, I will give some incentive to users who are accepting advertisement, something like discount coupon, from firms which want advertise through Facebook. This way makes my profit maximize. I don`t have to spend money to give to users. Actually, I will receive some commission from the advertisement. Conclusion In conclusion, despite of a many advantages, facebook doesn’t make much profit.
Facebook has faced many controversies regarding the privacy of its users. Though most of the information is contributed to facebook willingly by its users, still it doesn’t give facebook the permission to use them to gain profit without the concern of its users. Facebook must always make the privacy of its users as its first priority because without the users facebook wouldn’t be as popular as it is today. Recommendations Facebook should develop new ideas and strategies which would bring more members to them and which will lead to more profit for the company, without risking the privacy of its users.