Facebook’s Dilemma

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Facebook’s Dilemma
18th of June 2012 around 11:30 p.m. (Central Africa Time) I began to analyze and closely scrutinize the future of Facebook as a social network, an investment for Facebooks’ investors and also for current and potential advertisers. The more I looked at the prospect of the company and also on their ability to dominate the social network, the more I realize the social media company might actually fade out unless strategic and drastic measures were actually taken out by the management team. The fact is most Facebook social networkers now spend less time on the site as compared to about three to four years ago when users were practically addicted to the social network site.
The world is evolving rapidly and new technologies are erupting out of US, Europe, Israel and Asia at a fast pace. What will actually decrease the number of users of Facebook and the time they spend ‘facebooking’ is actually the invention of new mobile devices with distinct and innovative social network software and also the emerging of new and dynamic entrepreneurs. An example of this occurred some years ago when Blackberry broke out from just supporting and providing services for mobile phone companies into actually coming up with their own brand phone which comprised of features such as blackberry messenger, chat and other tech applications. The public welcomed the idea of this social networking as that period was what I called ‘The Blackberry Craze’. Not only did they support the public socially but was also a business boost as it made business communication and contacts much easier and efficient. This was so evident that almost everywhere that one happens to, you would see people just pinging (as that was the popular slang then). I can remember being in the bank at a time and I was on the queue waiting to make some deposit only to see that one of the bankers in front of me was so engrossed with his blackberry and he rarely concentrated on what was going on around him. Lecture rooms, buses, taxis and parks were not left out as people got so attached with this mobile device due to its social network functions.
People want the idea of having their friends and practically the ‘whole world’ (I use this literally) at their fingertip. Good enough, Facebook team recognized and understood this as they also came up with Facebook mobile software for phone users and this helped to avert the crash of the use of Facebook to some extent. The problem with the Facebook mobile application is that it was a setback for potential advertisers and consequently Facebook investors as they could not advertise on the mobile device. They failed to realize that people no longer have to carry their laptops or even tablets everywhere they go just so as to keep up with the social trend, people prefer to use their mobile devices to do this and in such way it makes more sense, it’s more practical and virtually far easier.
I agree that there are currently about 901 million Facebook users, but if you check the stats on the exact active users and the time they now spend ‘facebooking’, you will know there has been a decline. Not to my surprise, about a month or so later I was watching Bloomberg when there were reports about the skepticism of Facebook investors and also advertisers on how effective the adverts they place on their social network site is. The stock value compared to their IPO value was even more devastating as it had almost halved (and currently it’s about $18 or $19) and analysts including myself are expecting it to drop even further. Andy Borowitz (not a business analyst) an hilarious speaker who also writes for the Newyorker made one statement on his twitter account which sounded funny but actually that was the ugly truth. He commented ‘ facebook investors are not happy about the drop of the stock to $19, they should be rather happy/satisfied for something that is actually worthless. Another observer commented; Facebook is like the boyfriend you no longer like, but are scared to dump because you’ve invested so much time in the relationship. All these are pointers to where Facebook is headed unless the management team starts coming up with new ideas, innovations and strategies as new and emerging tech geniuses and IT entrepreneurs with mind dazzling and innovative ideas will take them and the social network world by suprise.
Balogun Femi
(Business Consultant)