ABOUT THE COMPANY|THE COMPANY'S MISSION|PRINCIPLES AND TECHNOLOGIES|PORTFOLIO|CONTACTS
INFORMATION
Internet Corporate websites Corporate portals Corporate systems Information websites and portals
Creation of websites Creation of corporate portals Creation of corporate systems Promotion IT support and management consulting Technologies About us
New articles in 2014
Optimal organizational structure of the enterprise Internet project "Corporate Management CFIN.ru" 2015
International Journal "Problems of Management Theory and Practice" No. 5, 2014.
The goal of the enterprise and the strategy for achieving it.
Conceptual framework
Journal "Problems of Economics and Management" No. 6, 2014.
Socio cybernetic model of the organization
Seminars and trainings
Seminars and trainings
Free seminars and trainings
Advanced Search
WE CREATE Business card Websites 01 Online representative offices 02 Online Storefronts 03 Promo sites 04 Online stores 05 Information Portals 06 Corporate Portals 07 Corporate Information Systems 07
Articles Encyclopedia News History Resources
Information > Information sites and portals
LabelHistory of success: Facebook http://www.e generator.ru/
Why is the Internet startup Facebook marked on the Startup website Review.com?
The Facebook website was launched in February 2004 by undergraduate students at Harvard University as an alternative to the traditional student directory.
The rumor about him quickly spread among students of American colleges.
Today, about 15 million unique visitors are registered on the site every month, and its pages are viewed 6 billion times a month.
The company has already passed two rounds of venture financing with very high amounts: the firm received $ 100 million in the first round, and $ 550 million in the second (however, these data have not been officially confirmed).
The reason for this financing was multiple offers to acquire Facebook, which the management still rejected (they say that the last time they wanted to acquire the company for $ 759 million).
The resource currently generates excellent profits.
Therefore, despite all the hype around metrics that control the accumulation of traffic, the company's business is still thriving.
Interviews were given: Noah Kagan, former manager of the release of new Facebook products.
Noah is planning to publish an e book about the site soon, in which he will talk in detail about working with social networks.
The book will be available for download on Mr. Kagan's blog OkDork.
Also, over the past two years, I have had a lot of informal conversations with people who have some kind of relationship to Facebook – company employees, investors and competitors.
I would also like to thank Nick Macey, a student at the University of Utah, for helping to research and write this analysis, as well as for providing a valuable view of the site from the user's point of view – as a student.
Nick will also help me in the future when working with Startup Review.
Key success factors
Creating an online service for an existing offline community
Facebook's success came thanks to the creation of a student information service on the Internet, at a time when nothing like this existed even offline.
The site became an interactive reference for university students, where you could view the schedule of classes for each course, as well as a social network for communication.
Before there were many applications in the resource, it was a simple, although quite extensive reference.
The site was not created around a new, non existent community.
It provided users – an already existing community of university students in the United States with important information and an opportunity to communicate.
While many college students already participated in various student groups and organizations, they did not have an affordable opportunity to learn more about each other (unless they were a member of one of the existing social networks).
Taking into account the considerable number of students at universities, students did not have a chance to fully communicate with all their classmates.
I remember studying at the University of Berkeley, when more than 200 students attended lectures at the same time.
It was not easy to see pretty girls or just familiar faces in such a crowd.
Thanks to Facebook, students could view fellow students on the site and see a potential passion for themselves.
Despite the fact that I used only one network user for an example, the purpose of visiting the resource by students is already clear: the search for possible partners.
If you look at the site more broadly, it should be noted that Facebook turned out to be a very useful online service that united the offline student community around itself.
An interesting lesson can be learned from this: it is much easier to create an online community if there is a user base for it in real life.
Restriction of user registration in order to create exactly the planned type of online service
The creators of Facebook developed an original model of the site's operation, which guaranteed harmony and trust between users (i.e., the offline student community) and the resource itself.
Initially, membership in the network was limited to those who had an email address“.
edu " on the website of the college where such users studied.
Also, students could search for and view the pages of only those who studied at their own university.
These measures were designed to let young people understand that the site itself is exclusive, and membership on it is limited only to their own offline community (college or university).
At the very beginning of the network's existence, 30% of users placed a phone number in their questionnaires.
I am not sure how accurate this data is today.
But it shows the fact that people trust those who view their account.
However, recently, those who do not have an email address “.edu” on the college's website were also allowed to register on Facebook.
Instead, within the framework of the startup, its own networks were created: based on high school classes, enterprises, geographical areas.
That is, if you become a member of one of these networks, you will be able to communicate only with its other users, no more.
Also, the resource has implemented information privacy control.
This allows users to decide who will be allowed to view their profiles, and who will not.
Penetration into micro communities
The Facebook network is more attractive to advertisers than other resources, because it penetrates deeply even into different micro communities – university campuses, for example.
If a local advertiser wants to attract the attention of students of a particular college, Facebook is the ideal way to do this.
The fee for a thousand clicks charged from local advertisers is a good income from advertising.
If we take into account that 65% of users visit the site every day, and 85% during the week, advertisers can very effectively conduct time – oriented marketing campaigns.
Large brands that value the vastness of the audience have the opportunity to bring their advertising to almost every American student in the age group from 18 to 22 years in one campaign.
In the future, the creators of the resource will have a considerable number of opportunities to diversify their income beyond the traditional banner advertising due to deep penetration into various micro communities.
In addition, the appearance of classified ads on Facebook, lists of upcoming events, trading via the Internet, as well as the use of the resource to identify potential consumers is obliged to the attention of 90% of students.
The site can also be considered the main place for placing classified ads on the Internet, if we take into account the peculiarities of using the network.
Creating a brand that is known to both users and advertisers
The most important thing in the online advertising business when working with branded advertisers (who strive for branding, not the number of clicks) is to create a serious brand with which these advertisers will want to associate themselves.
A recognized brand is exactly what makes sites get a high fee for a thousand contacts.
For sites with similar user bases, the cost of a thousand contacts can be very different.
And this is explained by the recognition of the brand and the image of the company.
While many of my interlocutors did not agree with me, I believe that Facebook managers did a great job on PR.
In almost every story about the resource, they focused on its impact on the lives of students and their use of online media.
How often do you hear that 90% of its registered users visit the site every week?
Of course, PR was the result of a serious growth of the company.
But using it for the benefit of a startup in order to advertise the brand was one of the key success factors.
The authority of the founders of the site among the audience of users
The face of Facebook is Mark Zuckerberg.
In February 2004, when Mark created Facebook, he was a student at Harvard.
Two of his comrades - Dustin Moskowitz and Chris Hughes became the second and third employees of the startup.
This ensured the credibility of the creators of the network in the eyes of users – other students.
They felt that this resource was created by one of them, and not just provided to them from the outside.
They could rely on the site, because the same student was at the head of it.
In addition, the startup has become extremely popular.
He immediately conquered Boston, and then the Ivy League (eight of the most preferred universities in the United States: Cornell University in Ithaca, brown University in Providence, Columbia University in new York, Dartmouth College, Hanover, Harvard University, Cambridge, Princeton University, Princeton, University of Pennsylvania in Philadelphia, Yale University in new haven).
Other universities has been on the queue – as long as mark and his friends found time to include them in the network.
The expectation created even more excitement around the enterprise.
Company Launch Strategy
Prior to the creation of Facebook, Mark Zuckerberg experimented with several other Internet projects.
In fact, his first attempt to create a student network at Harvard was called FaceMash.
But this startup was criticized by both teachers and students, and Mark refused to work with him.
Zuckerberg launched Facebook, at that time called thefacebook.com, in February 2004.
As soon as the site was ready, the creators sent out emails about it to Harvard students.
The team had access to the e mail addresses of students in each of the university dormitories.
That is, the launch of the site should be grateful to e mail marketing, attractive features of the network and word of mouth.
Due to the positive reaction to Facebook at Harvard, the creators of the network began to extend their service to other universities.
The site team did not use a launch strategy by region, they simply received requests for registration in the network from students of different universities.
The role was played only by the number of requests from each individual university – thanks to them, the choice was made.
Interestingly, the site of classified ads Craiglists is also starting to work with new cities based on user requests.
From all this, I realized that Facebook did not receive support from the universities themselves in advertising the site among students.
Analysis of the sale of shares
The blogosphere and the mass media have long been discussing who will buy Facebook, and at what price.
From a reliable source, I learned that the owners of the company, however, rejected the offer to buy the network for $ 750 million.
Recently, it was reported that the company is negotiating a sale with two potential buyers at once Yahoo and Microsoft – for the amount of 1 billion.
Is such a serious amount justified?
Here everything depends on the forecasts of the company's future growth.
But I believe that the authors in the blogosphere are wrong when they claim that Facebook's profits are not high enough.
In contrast, the network received about $ 1 million a week in the first quarter of 2006.
It seems that the total revenue of the site will be approximately 50 million for the whole of 2006 (as opposed to 10 million at the end of 2005).
Some reliable sources claim that the profit in 2007 will be neither more nor less than $ 200 million.
If we consider that three years after its creation, the site is guaranteed an income of 200 million thanks to an advertising deal with Microsoft, then the assumptions about 2006 and 2007 are quite real.
Many also note that Facebook is smaller than the MySpace social network in terms of generating traffic.
Hence, and evaluate its price is below $ 500 million (for which the MySpace service was sold).
This comparison, based on the number of unique visitors and page views, is initially incorrect.
After all, not all page views are the same.
There are several reasons why page views on the Facebook site are more valuable than MySpace views.
- The main user base of Facebook (college students) is more attractive than MySpace users (teenagers).
Since students already have a fairly stable income and use credit cards, they are a more attractive audience for advertisers.
- The Facebook startup gives advertisers the opportunity of local advertising, which is more interesting than MySpace.
After all, the first network guarantees a deep penetration into the student environment, while the second can not boast of the same.
The cost of a thousand contacts is always higher when conducting local advertising campaigns, as opposed to national ones.
This is due to a greater focus on the audience of local advertising.
- Facebook is perceived by brand advertisers as a safer resource in contrast to MySpace again because of the more natural image of the former.
In a market where advertisers are still wary of sites with user generated content, Facebook has proven itself better in terms of the market position of brands.
Another great part of the Facebook story is the ability of the site owners to manage the venture financing process, limiting the reduction in shareholders ' income when issuing new shares.
When the first round of venture financing of a startup was held in April 2005, the founders concluded an agreement on a preliminary assessment of the company's value (at 85 million) – and this was at a time when Facebook was generating income of only 500 thousand dollars a month.
The owners of the company were able to get such a high rating, attracting both investors and potential buyers at the same time.
With a deal plan in hand to sell the company for 85 million, the owners of Facebook were able to get more funding from venture investors.
I remember what the investors who participated in the first round of financing told about these days.
According to them, the company's value, initially equal to $ 20 million, grew every week until the Accel Partners venture fund invested $ 100 million in the network.
So, Accel Partners can only be applauded for such a thorough study of the startup's potential.
Other investors suggested that the firm would sell its shares in a couple of years for $ 200-300 million.
And an increase in the invested amount by only 2-3 times is not such a big jackpot, it will not justify the risk (and there is a risk, because the creators of the network are still so young and inexperienced).
Whereas, it seems that Accel will make a profit in two years, 8-10 times more than the initial investment of the fund of 13 million.
The recent round of investment, which resulted in the 25 million received by the startup, was accomplished thanks to a preliminary estimate of the company's value of $ 550 million.
And this is after the creators of Facebook rejected an offer to sell the site for 750 million.
Once again, the company's management did a great job, creating competitive conditions for the second round of venture financing.
The only thing I would really like to know is how the initial round of investment was formed – when the company received 500 thousand.
The former CEO of Pay Pal, Peter Thiel, became the investor of the capital at that time.
At that time, the network was working with only thirty student campuses.
Food for thought
The success story of Facebook is especially interesting to me for the reason that offline communities have united around the site.
In our daily life, there are a lot of activities that could be built around an online product.
However, if such offline actions are implemented once every couple of months, you will have problems with user visits to the site.
Will they remember about your service, and how will they return to it?
The example of Facebook demonstrates the possibility of creating an excellent network on the Internet, if users by occupation can visit the site every day.
As college students, users meet and communicate with new people on a daily basis.
A person is naturally curious, and, therefore, will certainly want to learn more about new acquaintances – this is how he becomes a visitor to the Facebook site.
That is, the resource regularly meets the needs of users in communication, constantly improving the usefulness of the service and endearing people to itself.
The need for visitors to return to the site must necessarily be realized by online entrepreneurs.
This is especially important if users do not have a need for their service very often.
Another lesson that the Facebook site has taught us is the importance of brand and PR for advertisers.
The amounts that brand advertisers are willing to pay for banners on your site are strictly subjective.
And getting them to give more is more of an art than a science.
To get a high fee for a thousand contacts, site creators must establish their brand not only among users, but also among advertisers.
Many social networks lack banner responses – after all, users come to the site to communicate, and not to search for information.
Perhaps in the future, the use of immersive advertising techniques (an example of such a technique is a thematic mini game, a video clip, a questionnaire, etc.built into a banner) will displace traditional banner advertising from social sites, but at the moment it is banners that are the source of their main profits.
Finally, we can learn from Facebook how the network's employees have gained the trust of users.
While it is easy to create an online product, it is not easy to get the faith of visitors – this will become a key factor in the success of the company.
Facebook won the hearts of students, because on the initial page of the site they saw only a list of colleges, one of which (their own) they had to choose.
After registering, users understood that the resource was created exclusively for college students.
Thanks to this, they felt comfortable posting personal information on their pages that they would never have posted on an ordinary social site.
It's simple, but that's the power.
The site really allows members of the network to guide who to give access to their questionnaires, and what exactly to demonstrate.
But they rarely change the default access setting.
That is, the most important thing in the trust of visitors is not the special properties of the interface, but the brand and open information about the service and those who use it.
Used articles
Facebook's Critical Success Factors is a publication on the Unit Structures blog by Fred Stultzman dated May 17, 2007.
Describes five key factors for Facebook's success.
Unlike my analysis, this publication also focuses on the properties that have conquered users.
Facebook - The Complete Biography article by Sid Yadav in Pete Cashmore's Mashable blog!
dated August 25, 2006.
A detailed overview of the network in different perspectives, but also a deep analysis of the product itself.
Inside Facebook: Life, Work and Visions of Greatness is an e – book, the author of which is a former engineer of the Facebook network – Karel Baloun (Karel Baloun).
I thought the book would be interesting from the point of view of a simple layman and a description of the startup culture.
But it told about the company as a business.
The material provided an interesting discussion about the idea and future direction of the resource, how the company earns money and how it gains the trust of users.
Dot Com Bubble: Why It's So Hard to Value Social Networking Sites article from the website of the Wharton School at the University of Pennsylvania on October 4, 2006.
The publication tells you in an interesting way how to evaluate Facebook and other social networks.
It provides the amounts of profits and estimates of the company.
Facebook on a roll, stay tuned – the work of Matt Marshall (Matt Marshall) in the blog SiliconBeat on August 29, 2005.
Interesting comments about why the startup is so successful.
Source: Startup Review: Facebook Case Study: Offline Behavior Drives Online Usage
__________________ Print version
Go to the Forum " Effective Enterprise Management"
Reviews, comments and questions on the article 03.11.2010 23:36 stasya is it true that Mark Zuckerberg created this social network??
or was it just that the film was made??
06.11.2010 3:38 Marat Of course it's true!
29.11.2010 1:51 someboy its be cool
30.11.2010 1:11 nancy Facebook alternaive.
http://connectler.com
30.12.2010 8:09 Liya vunderkindi!
BRAVO!
16.02.2011 15: 06 Rizalka I first watched the film, then it became interesting who created it... the movie is real..
13.04.2011 22: 10 Alla something I just didnot understand the ending of the film.
Add a review, comment or question on the topic of the article
Name
Text
Go to the Forum " Effective Enterprise Management"
Upcoming seminars and trainings
April 21, 2015 Free workshop "Motivation and corporate culture" Motivation of the team to achieve the set goal, formation of corporate culture, self organization and self management
May 19-20, 2015 Two day training seminar "Motivation and corporate culture" Motivation of the team to achieve the set goal, formation of corporate culture, self organization and self management.
Independent successful solution of practical problems
October 13, 2015 Free workshop " Strong Enterprise strategy.
Development and implementation " Practical methodology for the development and implementation of projects (with the provision of production per person up to 3-9 million rubles / year) enterprise strategy
November 11-12, 2015 Two day training seminar " Strong enterprise strategy.
Development and implementation " Practical methodology for the development and implementation of a strong (with the provision of production per person up to 3-9 million rubles/year) enterprise strategy.
Independent solution of practical problems
Venue: Moscow, AVIA PLAZA Business Park, Aviamotornaya Metro Station All seminars Free seminars
Our new trainings
Roman Zolotovitsky's Theater of Negotiations and Relations The Art of Dialogue and Event Management
The manager's communicative competencies
Dialogue between the Owner and the Manager
Optimization of the organizational structure
Centering and concentration training
West and East: A Cross cultural Bridge of Understanding
Strategic dialogue between the First Person and the Head of the personnel Service
Formalization of business processes and reorganization: new methods and technologies of implementation
Our new cases
Plays.
Roman Zolotovitsky's Organizational Theater And if a strong manager leaves?
Summit meeting
As if delegating
Director
Positional conflict at a manufacturing enterprise: a corporate sociodrama
Motivation in the style of " fat " years
The case of the financial analyst
It was so natural
OTHER MATERIALS ON THE TOPIC Latest news Archive
Encyclopedia Internet Portal
There are many definitions of Internet portals, but the only thing in which these definitions are quite clear is in terms of vertical and ...read the article Public Information Portal
Articles are Clients at a click away.
Social network
It is believed that the term "social network" was first coined in 1954 by a sociologist from the Manchester School, James Barnes.
Social network in ...read the article Corporate websites.
Public information portal Administrative resource - How do the regions of Siberia look on the web?
All articles on the topic
The story of 20 websites that changed the world
If we are talking about sites that have changed the world, then it is worth mentioning the very first one, which was developed by Tim Berners Lee and launched on August 6 ...read the article Websites that changed the world Success story: Rotten Tomatoes All articles stories on the topic
Resources Vertical and horizontal portals
"The terms "vertical" and "horizontal" still make sense, but whenever you use them, you need to put between them, I want to know everything!
Encyclopedias and reference books in WWW
Corporate website of the company "Corporate Internet Systems"
Moscow, B. Dmitrovka, 9, Publishing house "Trud" Inspro 1C
Tel . (985)
362-99-64
Email: info@corpsys.ru
© 1997—2008 CopSite.ru
