Facebook Inc - Research Paper Example

Facebook Inc Facebook Inc is a social networking company, its website enables users to communicate, share, advertise, connect as well as discover with each other worldwide with the use of computers and mobile devices such as mobile phones, Ipads etc. At the close of the year 2012, Facebook had over one billion active users every month and approximately four thousand employees; former Harvard students, Mark Zuckerberg, Chris Hughes, Eduardo Saverin and Dustin Moskovitz, founded it in 2004. The company does not charge its users but gets most of its earnings from advertisements on its website. One of the major issues that Facebook is undergoing is privacy, a survey that was conducted in 2010 listed Facebook among the bottom five when it came to matters of privacy. The issue was first noted in 2006 after Facebook introduced News Feed, which showed every change made by the user’s friends to their pages, it also introduced a service called Beacon that would allow users see products that had been purchased by their friends. After an outcry from the users, privacy controls were implemented which allowed them to control the content they wanted to appear in the News Feed section. In the year 2012, Facebook made losses of over 157 million dollars combined with an IPO that fizzled out due to technical hitches and high expectations, the company’s expenses have nearly tripled due to payroll expenses and stock-based compensation. Economic Factors The state of the economy might be negatively affecting the company’s revenue, as the cost of living appreciates; most people are forced to reduce on their spending and completely cot off unnecessary expenses. If the users are forced to be economical with their earnings, they might decide to reduce the amount of money they use on internet access charges their visits to the sites that they deem useful such as work or school related. In turn, Facebook might see a drop in their income as lesser people visit the site, which will in turn reduce the number of organizations that choose to advertise with the company. Sociocultural Factors One of the main objectives of Facebook was to bring people together as a social platform; it has successfully managed to do so seeing that it holds the largest number of users compared to any other social networking site. As people get busier, the community and families suffer because they no longer have the time to bond as it was in the earlier years but thanks to Facebook, members of a family or any other social group can keep in touch without being able to see each other physically. On the other side, certain sociocultural issues are affecting the company in a negative way, such as cyber bullying, cyber stalking and privacy. There is a rise in cases of people admitting to having been harassed via Facebook and suicide cases reported as a result, the users seem to be losing faith in the protection of privacy that Facebook accords them; this in turn leads to less site visits (Peterson 29). Global Factors Different global factors can influence the impact Facebook has in different regions, thereby determining whether the company is successful or not. Factors such as government regulation on the use of internet and banning of websites, as was the case in Syria, in 2007, when the government blocked Facebook to reduce online activism affect the company (Wilson, Kellerman and Corey 173). Other factors such as health issues come into play and might affect the revenue of the company as masses are being advised to spend less time on the internet, computer and other mobile device because of the health danger they pose. Technological Factors Technology is the medium that has brought forth the use of Facebook; it has made it one of the top 500 companies in the world and due to the increase use in technology, Facebook has become the most popular social networking site. On the other side, the growth in use of technology and devices such as mobile phones is becoming a threat to the financial prosperity of the company. The number of people using mobile devices to access Facebook is growing by the day, in turn, lessening the number of people using computers. Most of the revenue made by Facebook is through advertisements, which are visible on the computers only since no applications have been made to allow the same on the mobile devices (Lasher 369). The company attributes this to the growing number of users for its applications for smartphones and tablets therefore giving them less time to develop its strategy for mobile advertising. Facebook is unable to make money despite more people using mobile devices to chat and share pictures; this will admittedly affect negatively on their revenue growth. Political/ Legal Factors Due to the increase in social issues stemming from the use of Facebook, lawful measures had to be put in place to deal with the wrongdoers, but this well-meaning idea might do the company more harm than good. Users such as students or job seekers might decide to delete the accounts they hold on Facebook as they are being used as a source of information by their teachers and would be employers respectively. Despite the teachers and employers terming the information as public, the uses claim that this information is private and for use during their leisure time and should therefore not be used to gauge a person’s behavior in school or in a work place (Haftor, Bradley and Mirijamdotter 353). Demographic Factors This being the digital generation that ever existed, it would be safe to say that Facebook will continue enjoying popularity for a long time to come; the number of younger people creating Facebook accounts in comparison to a number of years ago is higher. Ensuring that Facebook remains fashionable and enticing to the youth is top on the agenda of the company and this is a great way of ensuring that it is not overtaken by other social sites and fizzle out. However, despite Facebook attracting users at a young age and managing to retain most of them, its popularity among the teens seems to be fading. This social network not only allows friends but parents and other relatives to befriend a user, it ultimately becomes a turn off, especially for the teenagers who spend a lot of their time on social sites and applications and crave privacy. Other networks might be slowly taking over; a challenge that has been acknowledged by Facebook itself, top on the list of its competitors is Tumbler. Works Cited Haftor, Darek, M. Mirijamdotter, Anita. Bradley, Gunilla. Information and Communication Technologies, Society and Human Beings: Theory and Framework. Hershey, PA: Idea Group Inc (IGI). 2010. Print. Wilson, Mark I. Kellerman, Aharon. Corey, Kenneth E. Global Information Society: Technology, Knowledge, and Mobility. Maryland: Rowman & Littlefield. 2013. Print. Lasher, William R. Practical Financial Management. London: Cengage Learning. 2013. Print. Peterson, Judy Monroe. How to Beat Cyberbullying. New York: The Rosen Publishing Group, 2012. Print. Read More