6:12 AM
kasunone
MEA CULPA. OK, I have to admit I’ve done my share of Facebook-bashing over the past year. “They’ll never survive without a search engine”, I said. “They’re mobile strategy is lacking, they’ve got no solid plan for monetization,” the list goes on. With over 900 million-users, a solid ad revenue stream, a brilliant app developer program, a successful long-term social mobile strategy, and a looming IPO, I have to concede, I’ve become a convert. Facebook rocks for developers, marketers and users...period.
DEVELOPERS: PLEASE BRING US YOUR APPS
As the world goes mobile, Facebook has figured out a way to cater to the app developer community at just the right time.
Here’s an excerpt from their developers guide:
“Over 425 million users access Facebook from a mobile device every month. Facebook Platform lets you bring these users and their friends to your mobile apps, creating a more engaging and personalized experience for your users.”
Facebook makes it easy for users to share a developer’s app with their friends using Requests, News Feed, and Open Graph. They’ve created a cross-platform interface (Javascript SDK) for apps to work across multiple mobile devices. Finally, Facebook Credits allows developers to accept payments for digital goods or services within the developer’s app.
In other words, Facebook is catering to the needs of an app developer, covering promotion, distribution, and payment.
For those who need more convincing, here are some recent stats from Facebook’s developers blog:
Facebook sent more than 160 million visitors last month to mobile apps (up from 60 million in late February).These mobile visitors were responsible for more than 1.1 billion visits to mobile apps in the same time frame (up from 320 million in late February).Seven of the top ten grossing iOS apps and six of the top ten grossing Android apps are integrated with Facebook. A few examples: Branch Out- Social professional network app. Grown from 1 million monthly active users to over 12.5 million monthly active users 12 weeks after releasing their Facebook integrated mobile web app. Over 18 million people visited BranchOut from Facebook in the past month.Viddy- Essentially an Instagram for video, Viddy's iOS app allows people to capture, alter, and share videos with their iPhone. Since integrating with Facebook, Viddy's community has grown to over 16 million registered users.Flixster- Movie review and info mobile web app, Flixster has grown the number of visitors from Facebook 10x to over 480,000 daily in the past 4 weeks. These visitors generated a total of 15 million visits in the same period.Let’s not forget that Instagram is an app too, just one that Zuck wanted all to himself. Chris Taylor wrote a great post in Mashable outlining Instagram’s phenomenal growth. The photo-sharing app now has more than 50 million users, adding approximately 5 million users PER WEEK. Granted, the app’s recent release on the Android platform has helped contribute to growth, but it is tops in the iOS app store as well. As Taylor notes, maybe that $1 billion it cost Facebook to buy Instagram was a bargain after all.
MARKETERS: PLEASE GIVE US YOUR DOLLARS
Like a squirrel gathering nuts for the winter, Facebook has been aggregating the profile information of its now roughly 900 million-strong user base for years, and it’s able to use much of this information to provide marketers laser-focused ad targeting. Location, age, gender, precise interests, Facebook connections, sexual orientation, relationship status, languages, education and specific workplaces are some of the fields on offer for keen marketers.
Another way the tech giant is trying to involve the marketing community is by offering sponsored stories, giving brands an opportunity to create stories that show up in a news feed of fans and their friends.
Attempting to court big advertisers, Facebook started Reach Generator, a premium advertising solution for large clients seeking to reach a larger percentage of fans through sponsored ads.
In short, Facebook wants to keep marketers happy: last quarter alone, Zuck and crew brought in a cool 1 billion in ad revenue. Unfortunately, (and ironically) as Paul Sloan points out in a recent post on CNet, Facebook is having trouble keeping up with advertiser demand. No shocker there, given their massive growth coupled with the virtual gold mine of user data they are sitting on.
USERS: PLEASE DONATE YOUR ORGANS
I won’t bother insulting your intelligence with an in-depth analysis of why Facebook appeals to users; if you have a heartbeat (and I sincerely hope you do) you’ve already heard enough about that.
Instead, I’ll leave you with a visceral example of Facebook’s intimate relationship with its user base. The same day Facebook CEO Mark Zuckerberg and COO Sheryl Sandberg made the announcement that users can add if they are organ donors to their timelines, the Donate Life California registry had an 800 percent increase in its organ donor registrations. Social engineering at its finest (maybe we should change the old children’s game “Simon Says” to “Mark Mutters”… just a thought).
For all of the snarky criticism of Facebook, they’ve largely gotten it right. In a world that is going social mobile at breakneck speed, they’ve figured out how to parlay their massive social network in a way that appeals to both mobile app developers and advertisers. Moreover, by doing so they’re able to offer an endless stream of new content to feed and grow their massive user base, which in turn gives them more data to leverage for greater ad revenue. Genius, plain and simple.
Which brings us to Facebook’s pending IPO roadshow, which begins Monday, May 7th. IPO roadshows ( in which company management presents its strategy to prospective investors) typically last one to two weeks, after which (sometimes during which) the stock begins trading.¹
Facebook is set to raise at least $5 billion in what will likely be the largest Silicon Valley IPO ever.
What are they going to do with all of that cash?
As Scott Sweet of research firm IOP Boutique recently noted, "I have not seen as broad-based interest in an IPO since Google. Investor demand is immense. I expect a roadshow that will rival all roadshows where investors will be turned away at the door."¹
However expensive Facebook’s IPO share price, I have a feeling that, like Instagram, it may prove to be a bargain after all.
¹ Reuters, "Update 1-Facebook's IPO show to hit the road May 7-source"
Image courtesy of Kamukamo.com
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