Facebook has now gone IPO. What are your thoughts about it and how do you see it being affected as a social networking site and a marketing tool? – Andy of San Juan
This is a very timely question – the talk of the town in the digital marketing industry. Facebook’s initial public offering of stock has been floated around and people are expecting to make a killing with this 100 billion dollar company finally going public. However, as seen many times with companies that create business revolutions, change the marketplace and do their IPO, they eventually become slaves to Wall Street. Most internet darlings, such as Facebook and Twitter, ride on their novelty and their rebellious attitude – their anti-establishment personas giving them a special image that is sought by the youth today (alongside the promise of patronage). Facebook now has to take these realities into consideration as they move toward uncertain realms in the digital space and with dynamic internet-user behavior.
The question is not really about Facebook being ready to face Wall Street and the pressures that go with it, but is still more about Facebook being ready for the ever-changing digital landscape.  Have they planted the right seeds for business sustainability? While they now have to contend with the formalities of business, they also should not forget to, foremost, remain relevant to their users. So, is Facebook prepared? In my opinion, a lot of work is needed if they want to stay in business, especially to be accountable now to its public shareholders. Here are some of my concerns:
Facebook is not yet fully ready for mobile. With the next generation of users accessing the internet through a mobile device, I have yet to see how all the Facebook functionalities we are enjoying in our computers can be similarly enjoyed through a mobile platform. The same goes with advertising inside Facebook or with the use of applications. Mobile phones and tablets are now becoming the primary internet access points. Can Facebook “mobilize” in time versus other sites that are more mobile-friendly, like Twitter, or Instagram?
Websites come and go. Except for institutions like Google, eBay and Amazon, internet users change faster than websites upgrade. Business sustainability is always a question, since the more users a website would have, the higher the bandwidth that is required to sustain the users of the website. Moreover, the demand for advertising revenue increases given the increase in cost. While the withdrawal of General Motors’ ads in Facebook may not affect the topline revenues of Facebook much, what is important to look into is how this will affect other advertisers and if it will create a domino effect.
Facebook has only succeeded in what they are now. Their Facebook marketplace for example, has not gained enough traction to compete with other e-commerce sites. It has not also been successful in penetrating China, which comprises 1/3 of the world’s internet population. China’s social networking site and micro-blogging site RenRen and Weibo, have fully entrenched themselves into the Chinese internet population. With the growing Chinese market, multinationals have seen that there are opportunities to create digital footprints on other platforms outside Facebook. How else can Facebook expand and grow? Has it already reached its peak in terms of users?
Like Google and Yahoo, Facebook will soon have to put more activities and put more focus into their business model, offering digital marketing solutions to brands and businesses. They may have to eventually start offering marketing services to advertisers, but consequentially alienating the advertising and media agencies who were once their partners. Facebook has to find a way to ensure that beyond understanding their user-base, they also understand the digital marketing ecosystem where they get their bread and butter.
The next few months for Facebook are truly critical as they become an “establishment”. Recent digital companies like Zynga and Groupon that went IPO did not do well. Note that internet companies are not selling any problems, so they are treated like a media company where revenues are acquired through advertising. I expect Facebook to fare better, as long as they return to their fundamentals, give value, and remain relevant to its almost 1 billion users. The future is unwritten and unclear, and regardless of the excitement and criticism of its entry into Wall Street, I applaud this move of Facebook’s founder Mark Zuckerberg to once again make waves and create history.
Donald Lim is the Chief e-Marketing Strategist of Mansmith and Fielders, Inc. (www.mansmith.net), the leading marketing and sales training company in the Philippines. Please email info@mansmith.net, call (+63-2) 584-5858 / 412-0034 or text 0918-81-168-88. Please also send your marketing, sales and strategy questions to mentors@mansmith.net.