Expert comment on Facebook

By Markos Zachariadis

Its recent investment in mobile applications, which include the recently launched ‘Paper’ application in the US as well as the acquisition of Instagram, plus efforts to understand better and target the mobile advertising business can ensure it is around for another 10 years and beyond. I can see it going from strength to strength – predictions for population accessing the internet from mobile devices in 2017 is an impressive four billion!

Facebook has a huge amount of data on its 1.23 billion users; lots of companies would pay a big premium to take advantage of that information, which has major implications for marketing. In the age of big data Facebook can capitalise on this user generated data for even better targeted advertising and marketing.

Facebook has created a rich marketing ecosystem providing solutions for many organisations, who are eager to go beyond the occasional ad and keen to engage with their customers (it is a social network after all). Allowing developers to plug onto its platform through APIs (Application Programming Interface) is also a smart move by Facebook that opens the door to additional value propositions for its extensive user base. The successful examples of social gaming, and Zynga more specifically with the successful launch of FarmVille in June 2009, demonstrates the breadth of opportunity within the Facebook ecosystem – Zynga is now a $1.14bn revenue company and until last year 80 per cent of its revenue came from Facebook.

Security and privacy are two of the most important elements for the success of social networking sites in the near future. Who has access to our digital footprint and the data that we generate throughout our interaction with social platforms are important issues most networks will need to address based on local laws and international regulations.

About the author

Markos Zachariadis is Warwick Business School Assistant Professor of Information Systems, being a researcher on innovation in social networks.

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