facebook for all
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for All
George Dy, Tian Wang, Timothy Yung, Anhang Zhu
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
Agenda• Background
– Social Media Landscape– Strategic Issues– Target Audience
• Recommendation• Solutions
– Solution 1: Interactive Facebook Pages– Solution 2: Extend Facebook Credits– Solution 3: Develop a Facebook Marketplace– Solution 4: Facebook Questions
• Financial & Technological Impact• Implementation Timeline• Conclusion
Facebook for All
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
Social Media Landscape• Facebook General Statistics– 400+ million users1
– 500,000+ active applications1
– 1.5+ million businesses have Facebook Pages1
– 2.7% of Global Search Search Growth2
• Social Media Statistics– 58.59% on Facebook3 September 2009– 30.26% on MySpace3 September 2009
Facebook for All
1 http://www.facebook.com/press/info.php?statistics2 http://www.insidefacebook.com/2010/04/10/facebooks-search-traffic-continues-to-grow/3 http://www.hitwise.com/index.php/us/press-center/press-releases/2009/social-networking-sept-09/
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
Strategic IssuesReinforce Facebook’s mission to give people the power to share
and make the world more open and connected.
Avenues for
Growth
Market Expansion
Product Development
Revenue Streams
Facebook for All
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
Target Audience• Cater to existing audience• Indirectly target older audience• Business is globalized– People all over the world have local businesses– E-commerce plays an increasing role in GDP– Exploits Facebook’s language support
• Target independent artists and musicians
Facebook for All
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
Alternate Audiences
• Why not target teens?• Why not target children?
• Teenage demographiccontinues to increaseregardless of marketing.
Facebook for All
1 http://www.istrategylabs.com/2010/01/facebook-demographics-and-statistics-report-2010-145-growth-in-1-year/
13-1718-24
25-3435-54
55+
Unknown
05
101520253035
User Base Growth1
Increase from 2009-10Number of Users in 2009
User Age Groups
# U
sers
(Mill
ions
)
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
Recommendation• Facebook must provide a suite of functions to
attract users outside key demographics
• Facebook must develop products that create a richer and more interactive experience for businesses
• Facebook must utilize personal social networks to address competing services like MySpace and Yelp, and provide competing resources for independent artists and restaurants
Facebook for All
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
Four Solutions• Solution 1: Interactive Facebook Pages
• Solution 2: Extend Facebook Credits
• Solution 3: Develop a Facebook Marketplace
• Solution 4: Facebook Questions
Facebook for All
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
SOLUTION 1 Interactive Facebook Pages• Problem– Users without online social networks lack incentives
to use Facebook– Facebook Pages lack user interaction and general
accessibility
• Goal– Establish Facebook Pages to become the de facto
social profile for businesses– Expand Facebook Pages to serve as interactive
avenues for general users, not just Facebook usersFacebook for All
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
• Implementation– Improve general accessibility to Facebook Pages
• Removing “login requirement” increases available audience• Redevelop Facebook landing page to include page search or directory
browsing based on locality
– Begin by targeting restaurants and independent artists to establish Facebook Pages as the default profile for businesses and artists• Create modules catered to specific page categories• E.g. reservations for restaurants, music store for artists
• Results– Expand Facebook’s user base and retain existing users by providing
a more interactive experience– Monetize Facebook pages by offering premium modules
Facebook for All
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
SOLUTION 1 Interactive Facebook Pages
George Dy | Tian Wang | Timothy Yung | Anhang ZhuFacebook for All
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
SOLUTION 1 Front Page Mockup
George Dy | Tian Wang | Timothy Yung | Anhang ZhuFacebook for All
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
SOLUTION 1 Reservations Module Mockup
George Dy | Tian Wang | Timothy Yung | Anhang ZhuFacebook for All
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
SOLUTION 1 Reservation Notifications
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
• Problem– Third-party developers are using Facebook’s user base and creating
more competition for Facebook (e.g. iLike).– Facebook Credits only used for Gifts (which accounts for 30% of
Facebook’s revenue)– Users are not aware of Facebook Credits and the potential business
models are not fully exploited
• Goal– Promote the use of Credits across more Facebook properties to increase
trust in Facebook as a business– Enable Facebook to serve as a middleman to conduct transactions
between its users and itself or businesses– Use Credits as a method to utilize Facebook’s exclusive eCommerce-style
marketplaceFacebook for All
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
SOLUTION 2 Extend Facebook Credits
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
• Implementation– Allow users to purchase (via gift cards or electronically) Facebook
Credits and use them in applications– Allow users to store and manage credit card information
• Allow users to purchase goods directly via credit card or other services (e.g. PayPal, Google Checkout)
– Develop in-house and acquire promising 3rd-party applications– Offer incentives to use Facebook Credits outside of the new use for
purchase of tangible goods in the marketplace– Allow Facebook Page owners to upgrade their service for enabled
access to specialized business modules
• Results– Greater monetization for the use of in-house or acquired Facebook
applications, increasing revenue streamsFacebook for All
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
SOLUTION 2 Extend Facebook Credits
George Dy | Tian Wang | Timothy Yung | Anhang ZhuFacebook for All
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
SOLUTION 2 Existing Business Model
George Dy | Tian Wang | Timothy Yung | Anhang ZhuFacebook for All
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
SOLUTION 2 Potential Business Model
George Dy | Tian Wang | Timothy Yung | Anhang ZhuFacebook for All
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
SOLUTION 2 Facebook Gift Cards
George Dy | Tian Wang | Timothy Yung | Anhang ZhuFacebook for All
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
SOLUTION 3 Current Facebook Marketplace
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
• Problem– Facebook does not exploit all the potential
eCommerce opportunities involving social networks– Facebook lacks an avenue for vendors (e.g. with
Pages) to sell products and services
• Goal– Acquire Facebook Marketplace as the de facto
destination for all Facebook users looking to shop within friend networks or local businesses
Facebook for All
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
SOLUTION 3 Develop a Facebook Marketplace
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
• Implementation– Acquire Facebook Marketplace from Oodle.com– Aggregate all products offered by users or businesses in the
Facebook Marketplace– Create a Facebook Marketplace shopping cart and wish list to
aggregate purchases and allow sharing product lists with friends• E.g. Wishlists will appear on user profiles during birthdays
– Allow users to make online transactions
• Results– Increase revenue through business and featured product listings– Encourage the use of Facebook search for eCommerce– Develop Facebook into a sales intermediary between users, taking a
percentage of seller feeFacebook for All
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
SOLUTION 3 Develop a Facebook Marketplace
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
• Problem– Facebook is lacking a strong community feel
outside of personal networks– New users lack retention rate because questions
are often left unanswered
• Goal– Develop a stronger Facebook community outside
of friends networks to promote higher retention of new users and provide incentives for active users
Facebook for All
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
SOLUTION 4 Facebook Questions
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
• Implementation– Create Facebook Questions to provide a community that
answers new user questions about Facebook or anything trending
– Develop a strong community feel that offers support and the promotion to Facebook Expert, which is a title that is offered to the users with highest answer count
– Users can connect with people outside of personal networks if they are lacking friends, greater incentive to stay on Facebook
• Results– Retain new users and provide stronger community incentives
to increase time spent on Facebook by existing usersFacebook for All
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
SOLUTION 4 Facebook Questions
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
Estimated Annual Profit for Marketplace
($60B Traded2)/(90M Active Users2) = $667 Traded per Active User ($8.7B Revenue)/($60B Traded2) = 14.5% Revenue Margin on Traded
Goods ($2.4B Profit)/($60B Traded2) = 4% Profit Margin on Traded Goods
Estimated active users that make at least $50k per year:(400M Active Users)(67%1) = 268M Potential Marketplace Users
Facebook for All
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
Financial Impact
1 http://www.socialtimes.com/2010/04/demographic-of-the-7-most-popular-social-media-sites-infographic/2 http://investor.ebayinc.com/
Adoption Rate Average (50%) High (80%) Low (10%)
Predicted Users 134M 214.4M 26.8M
Active Goods Sold $89.333B $142.933B $17.866B
Revenue from Active Goods $12.95B $20.73B $2.59B
Profit from Active Goods $3.573B $5.717B $0.714B
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
Additional DatacenterDue to the increased use in user base and Facebook Marketplace, Facebook will be required to upscale its datacenters in preparation for the surge in trafficEven though Facebook has already begun building a 35-acre custom datacenter in Oregon that is scheduled to be available in June 2011, Facebook needs to have enough hardware until this datacenter is complete
Facebook for All
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
Technological Impact
George Dy | Tian Wang | Timothy Yung | Anhang ZhuFacebook for All
Estimated Total Cost for Development
Server Cost (775M Users in June 20111)/(220M Users in May 20092)
= 352% user base growth($25M server cost in June 20112) * 352%4
= $88M projected server cost in June 2011
Operation Cost for MarketplaceAverage: $9.38B High: $15.01BLow: $1.88B
1 http://www.insidefacebook.com/2010/04/06/facebook-sees-solid-growth-around-the-world-in-march-2010/2 http://www.facebook.com/press/info.php?timelined3 http://www.salarylist.com/all-real-jobs-salary-at-facebook-inc.htm4 assuming data grows parallel with user growth, compounded over 15 months
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
Technological Cost
George Dy | Tian Wang | Timothy Yung | Anhang ZhuFacebook for All
Estimated Total Cost for Development (cont.)
Labor Cost
($70K Annual salary for Software Engineers1/12 months per year)*(50 Software Engineers)*(9 months) = $2.63M in labor
Estimated Acquisition Cost
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
Technological Cost
iLike Estimated Acquisition Price by MySpace $20,000,000 Kaango Acquisition Price $20,000,000 iLike Esimated Worth $1,530,000 Kaango Esimated Worth $144,306.40 iLike Acquisition Multiple 13.07189542 Kaango Acquisition Multiple 138.59
Lala Estimated Acquisition Price by MySpace $17,000,000 Oodle Esimated Worth $867,707.00
Lala Estimated Acquisition Cost $15,947,712Oodle Estimated Acquisition Price $120,258,977
Lala Acquisition Multiple 13.93442623
Average Facebook Related Website Acquisition Multiple 13.50316083
Range of Acquisition PriceOodle Esimated Worth $867,707 Low $11,716,787Oodle Estimated Acquisition Cost $11,716,787 High $120,258,977
1 http://www.websiteoutlook.com/
George Dy | Tian Wang | Timothy Yung | Anhang ZhuFacebook for All
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
Implementation Timeline
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
• Stronger Facebook community outside friend networks
• Stronger monetization through Facebook Marketplace
• Utilization of Facebook Credit, line of currency exclusive to Facebook users for exclusive Facebook offers
• Pages become a default profile for business and independent artists, eliminating competition from Yelp and MySpace
Facebook for All
Background » Recommendation » Solutions » Impact » Timeline » Conclusion
Conclusion
George Dy | Tian Wang | Timothy Yung | Anhang Zhu
Questions
Facebook for All