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Many of early communication tools focused on bringing people together to interact with each other through chat rooms, and encouraged users to share personal information and ideas via personal webpages by providing easy-to-use publishing tools and free or inexpensive webspace. This also leads to the rapid increase in social networking sites'' popularity with big name such as MySpace is getting more page views than Google, or Facebook was launched in 2004 then became the largest social networking site in the world in early 2009. This report with aims to explore the Facebook’s service and provide some evidences of its performances as well as find out the ways to set up this kind of business in Vietnam to be successful.
1 MASTER OF BUSINESS ADMINISTRATION INTERNATIONAL PROGRAM ASSIGNMENT INFORMATION TECHNOLOGY FOR MANAGERS Submitted to: PhD. Dr. Pham Van Tai Submitted by: Huynh Thi My Dieu ID No.: CGSVN00014998 Class: MBAOUMM0313 Ho Chi Minh City, July 2013 2 Acknowledgement …………………………………………………………………… Abstract Many of early communication tools focused on bringing people together to interact with each other through chat rooms, and encouraged users to share personal information and ideas via personal webpages by providing easy-to-use publishing tools and free or inexpensive webspace. This also leads to the rapid increase in social networking sites' popularity with big name such as MySpace is getting more page views than Google, or Facebook was launched in 2004 then became the largest social networking site in the world in early 2009. This report with aims to explore the Facebook’s service and provide some evidences of its performances as well as find out the ways to set up this kind of business in Vietnam to be successful. 3 CHAPTER 1: OVERVIEW OF FACEBOOK.COM 1.1. Introduction: Facebook.com was created in 2004 by Mark Zuckerberg, Eduardo Saverin, Dustin Moskivitz and Andrew McCollum, originally designed for college students with the name TheFacebook.com. But from 2006, anyone who possesses a valid email address with over 13 years old could join Facebook. It makes easily for users to connect and share with family and friends online and has even helped the web become more open and social. Today, Facebook is the world's largest social networks and keeps growing for many years to have 1.750 staffs and offices in 12 countries in early 2013. 1.2. Log in: To explore Facebook, users must create a free account on the site. Facebook requires new members to provide a valid e-mail address before completing registration. After created an account, Facebook will ask new members answered a few questions about some general information such as work, education, etc. After doing so, Facebook will generate a profile for new member. Picture 1.1: Facebook Homepage to log in/ sign up 4 Here are general steps to create an account on Facebook for personal use: Figure 1.1: Steps to create an account at Facebook.com After these above simple steps, The Welcome to Facebook Page will appear. Then Facebook will send you an email to confirm about your registration. Before you can access all of Facebook's features, you will need to confirm your email address. To create a Facebook page, we have to choose one of six categories including: - Local Business or Place - Company, organization or Institution - Brand or Product - Artist, Band or Public Figure - Entertainment - Cause or Community Go to www.facebook.com Under the words Sign Up , enter your personal information and desired password Click Sign Up Find yours Friends (Can skip this step) Add information about yourself such as education, employment, etc. (You also can skip this step if you want to keep them privately) Add your Profile picture (Upload available picture of yours or take a photo from webcam – You can skip this step if you are not ready to show your profile picture) Click Save and Continue 5 Picture 1.2: Six Categories of creating a page on Facebook 1.3. Products/ Services: Facebook is offering various applications to write personal blogs, share images, video and stories in social communities. It also supports e-marketing and offers many services to worldwide marketers. 1.3.1. For individual: create profile with photos, lists of personal interests, contact information, and other personal information; communicate with friends and other users through private or public messages and a chat feature; Join, “like” or run common interest groups or pages (organized by business or brand). 1.3.2. For organization: advertise across the platform to run a page and promote their products or services. In summarize Facebook’s products/ services can be listed as the following table: Name of Products/ Services Description Year of introduction New Feed - An updating list of stories from friends, pages, and other connections, like groups and events. - People can like or comment on what they see. - Each news feed of user is personalized based on their interests September 2006 6 and the sharing activity of their friends. Timeline - A new kind of profile that lets people organizes and highlights the events and activities. - People choose the information they want to share on their timeline, such as their interests, photos and work history and can control who sees the sharing contents. September 2011 Graph Search - A structured search tool that lets people use simple phrases like “Photos of my friends in Vietnam” to find people, places, photos and other information shared with them on Facebook. - When turned on, Graph Search replaces the search bar at the top of every page of Facebook. Messages - Allow to send messages, emails, chats, and text messages together in one ongoing conversation whether they’re chatting on the web or texting on the go. - Messages are organized by conversations with friends or groups of friends. February 2004 Photos and Video - People can upload unlimited number of videos and high- resolution photos, create albums, and share with their friends or any audience they choose. - It’s easy to add details like captions, locations and tags. Tagging lets people identify a friend in a photo or video, easily sharing that content with them October 2005 Groups - A private space within Facebook for people to discuss common interests. - Allow to create a small set of people such as family, teammates or best friends. - People within a group can post updates, photos and chat with everyone at once. They also can customize the privacy settings for each group they create September 2004 Event - People can organize gatherings, manage invitations and send notifications and reminders to their friends. - To invite their friends to anything from a dinner party or a community charity performance. Pages - A public profiles that let artists, public figures, businesses, brands, organizations, and non-profits create a presence on Facebook and connect with the Facebook community. - When someone likes a page, they will see updates from that page in news feed. - When someone likes or comments on a page post, that activity may be shared with their friends, increasing the page’s exposure and reach. November 2007 Platform - It enables developers to build social apps, websites and devices that integrate with Facebook and reach millions of people. May 2007 Apps - Enable people to connect with their friends, whether it’s through playing a game, watching a movie, sharing their favorite restaurant, or listening to a song. - New social apps that integrate with Facebook are emerging on phones, through websites and within Facebook. Social - Social plugins help developers and publishers drive growth and 7 Plugins engagement for their websites with a single line of code. - For example, social plugins allow people to easily share interesting content with their Facebook friends through News Feed. Examples include: • Like Button: people can share a web page or a piece of content with their friends in one click. • Subscribe Button: people can follow their favorite public figures in one click. • Comments Plugin: people can easily comment on articles, see the most relevant comments and share their comments with friends on Facebook. • Single Sign On Registration Plugin: People be able to login without having to fill in registration forms or remember another user name and password. Sponsored Stories - Marketers can amplify the distribution of stories that people have already shared with their friends. - For example, when someone posts on Facebook that they have “checked-in” at a restaurant, their friends may see that in their News Feeds. The restaurant can purchase sponsored stories to increase the distribution of that story to the person’s friends. - Sponsored stories also enable marketers to promote stories to people that have liked their Facebook Page. Table 1.1: Facebook’s products and services Picture 1.3: Examples of Apps on Facebook 1.4. Payment: Facebook offers an easy way for people to buy digital and virtual goods in apps on Facebook such as premium items in games or video-on-demand movies. Payment options 8 include credit and debit cards, PayPal, mobile payments, gift cards and numerous local payment options around the world. In 2010, Facebook’s payment system charged a 30% fee to publishers of Facebook applications for virtual goods transactions. People can store their payment information on Facebook in a trusted environment and then make purchases across a range of apps without having to re-enter their payment information in each app. Using Facebook’s payment infrastructure, developers can focus on building great games and apps rather than having to build their own payment and deceit management systems. 1.5. Link the Website’s service to other ones: People can Share, Like or Search on other websites that integrate with Facebook whenever they see display image of Facebook. Other integration activities from Facebook such as: • Like buttons: update Facebook profile when clicked • Activity button: show what friends are doing on the site • Add Comments: add comments to any web page • Recommendations: suggestions for web pages • Like box: view Facebook Page stream from website • Website Login/ Registration authentication through Facebook 9 Picture 1.4: Facebook’s integration with the website Mashable Facebook create opportunity for developers Open Graph API and Social Plugins that they can use to build different experiences for users, including Apps on Facebook, Desktop Apps, Mobile Apps, and Platform-integrated websites. For example, Facebook users can publish Facebook Status Updates on Twitter and publish Tweets on Facebook. Picture 1.5: Example of Integration between Facebook with Tweet and Twitter On Facebook, a public profiles that let artists, public figures, businesses, brands, organizations, and non-profits create a presence and connect with the Facebook community. It comes to the results that when someone likes or comments on a page post, that activity may be shared with their friends, increasing the page’s exposure and reach. In terms of its partners, Facebook has linked connection with many companies in different services such as Netflix, Hulu, Spotify, Washington Post providing online movies, TV shows, music, and news. At the end of March 2012, more than 9 million apps and websites integrated with Facebook. 10 CHAPTER 2: FACEBOOK’S BUSINESS MODEL 2.1. Business Model Facebook follows Advertising E-business Model for earning revenues in exchange for displaying advertisements on its website. Facebook draws the attention of millions of users which is a mine stone for advertisers targeting a particular market segment. Facebook relies on an old internet business model: display ads. The good news for Facebook is there is a lot of room to target ads more effectively and put ads in more places. A Consumer - to - Consumer (C2C) business model is one of model in which firms facilitate the exchange of data directly between its users over the internet, providing a platform to load text, images, music/ video files, etc. for sharing among users. This platform for sharing and interaction has a commercial aspect with the aid of advertising. Distinguishing itself from the conventional media, social networking sites like Facebook keep its users with unique designs and sponsored online content. According to Canzer, the level of traffic to a particular website acts as a tool to understand how appealing the site is to its users, its effectiveness in its brand awareness and an attraction to marketers and advertisers (StudyMode.com, 2008 ) . Facebook also incorporates community e-business model which is an e-business model built around the notion that a group of online users can be regularly brought to a common platform. Facebook successfully makes communities within its own community. Even the Facebook users form an part of the virtual brand or community of Facebook users in contrast to users of other sites such as MySpace. Within this virtual community lie thousands of other communities built by users, band groups, advertisers, etc. 2.2. How Facebook’s Business model work: The Mission of Facebook is to open and connect the world. It has built a Multi-sided Platform (MSP) that serves different customer segments with different value propositions. Advertisers can further engage their audience by incorporating social context into their ads such as displaying when someone’s friend has liked an advertiser’s Facebook Page. The website also helps users stay connected with their friends, families, and colleagues as well as to discovers and learns more about what is going on in the world. People express themselves by sharing their opinions, ideas, photos, and activities. [...]... From Mobile From http://marketingland.com/facebook-q3-earnings-36percent-ad-revenue-growth-14-percent-from-mobile-24846 10 Michael Arrington (2010) The Age Of Facebook Retrieved from http://techcrunch.com/2010/04/25 /the- age-of-facebook/ 11 Socialmediainfluence.com Why Facebook Massages Matter Retrieved from http://socialmediainfluence.com/2010/11/16/why-facebook-messages-matters/ 26 12 Social Net Working... http://www.statista.com/topics/751/facebook/chart/870/facebook-s-user-growthsince-2004/ 14 StudyMode (2008) E Business Model – Facebook Retrieved from http://www.studymode.com/essays/E-Business-Model-Facebook-155439.html 15 Thenextweb (2013) Zuckerberg’s Vietnam holiday is chance to get Facebook unblocked there Retrieved from http://thenextweb.com/facebook/2011/12/24/zuckerbergsvietnam-holiday-is-chance-to-get-facebook-unblocked-there/ 16 Willis... support in an otherwise unmanageable situation - All sites use for purpose of sharing of information and they provide online entertainment services; - Business and individuals can advertisements and promote their goods and services to customers by such effective ways; - They all have linked to various websites 4.3 Differences points of Facebook from other ones in Vietnam make it success: - Facebook is... (2012) Facebook Got More Revenue On LOWER Sales And Marketing Costs In Q2 Retrieved from http://www.businessinsider.com/facebookgot-more-revenue-on-lower-sales -and- marketing-costs-in-q 2-2 0127#ixzz2Vjq5yG8P 8 Jonathan Strickland (2013) How Facebook Works Retrieved from http://www.howstuffworks.com/internet/social-networking/networks/facebook.htm 9 Marketingland (2013) Facebook Q3 Earnings: 36 Percent Ad... communication, openness and simplicity; - Being a new trend and satisfying a niche need (the need for a faster way of communication) User’s Perspective: - Make it adoption by its users: effort expectancy, facilitating condition, playfulness, status updates (short messaging) and open culture 5.2 Risk points: - May get fake information from users; - Many competitors, especially the limit of foreign languages... in these markets - Presence of Network Effects Facebook is benefiting from very strong network effects since its inception Online advertisers benefit from having a large base of search users, but it doesn’t lead to network effects Facebook benefits from the same-side network effects between the Facebook users Facebook also benefits from the cross-side network effects between the developers and the. .. applied for users around the world make it not much attractive - Less security 5.3 Recommendations to be successful on the Site: - Continuing PR activities, preventing technical problems and preparing technical - Structure for higher user’s volume, satisfying new demands by users, paying attention to the monetizing strategy - Offer its predecessors (options such as: Home, Profile, Finding people and etc)... networking - Providing its users both web-based and mobile platform SNS - Specialize in various fields to attract specific targets, chose a specific (selection) category(ies) for target audience - Pay attention to main key elements: The main reason behind SixDegrees’s failure was that the site provided its early adopters nothing more than a simple way of connecting and communicating with others” (Boyd... is trying to lockin users with their data in form of emails, photos, videos, documents, and blogs Facebook has over 100 billion friendships The company has achieved data lock-in with their users 14 - Customer concentration Facebook has a “long tail” of customers and does not dependent upon any single customer for its revenues The website has implemented self-serve auction-based Ad products This makes... traffic share, with Gmail the one property that puts Google over the top Looking further down the Top 10 list, the only thing keeping Yahoo even remotely competitive in the competition for eyeballs is Yahoo Mail The same could be said of Microsoft Its Windows Live Mail is keeping it barely in the game Success of Google because of two major innovations: their core search product, and their keyword advertising