BUSINESS MODEL OF FACEBOOK
||CASE STUDY BY VIKAS ||
Today we’ll talk about business model of Facebook. How do they earn? How he came with this idea About funding Problems he faced. His user base. Revenue. Companies they acquired. And their long term visions Let’s start So story starts from 2004 Two friends Mark and edurdo it’s pronounciation doesn’t matter Because many people comment That i don’t know how to prounounce some words It’s fine You can see the spelling here You can pronounce on your own.
So they were students of Haward University and they both got this idea In the beginning when they started this It was just for Haward University Then it gradually got popular in other places also and today we know the position of Facebook . In starting Facebook was not like this Facemash It’s an application like tinder Where you can choose the best picture Hot or not Good or bad You can select it accordingly If you have not seen Tinder, i’ve made a business model on tinder You can check on i button So it started in 2004 it was coded by mark only 1 Oct 2005 Mark expanded it to 21 Universities Means their market share was increasing So 26 SEP 2006 They made it open for everybody ANyone can register here You need to have email id and phone number and you should be above 13yrs So in 2007, their user base was reaching the sky Like around 10k business pages On facebook. And in 2008 They even built an international head office on an island Feb 2011 it was Facebook was number 1 Photo host In the whole world More than 100 billion photos were uploaded and after one year They bought instagram too Instagram is the god in this field nowadays Means they’ve already planned that Facebook will be separate And for photo uploading platform.
That’ll be in instagram only I’ll tell you about this later Now even facebook had bad days, 12 march 2012 Yahoo sued them According to yahoo, facebook violated 10 patents But This didn’t affect their funding Means funding was coming In the starting They invested their own money Becuase these things doesn’t need much investment You can start from normal level. 2004 Thill partner Invested 5 lakh dollar invested in his company Where they lost 10.6% share April 2005 ACCEL Partners THey bought around 13% of shares You can see slides in the left Funding amount and everything After one year April 2006 They started receving lot of fundings Around 2.5 Million Dollar funded by Greylock partners, meritech capital This stat didn’t stop here THeir overall evaluation was around 500 Million. This much In a short span After this, news declared that facebook is offering something 750 million An unknown person wants to buy it But facebook did not accept it and they asked for 2 Billion dollars Sep 2016 Even Yahoo tried to buy it They offered 1 Billion dollars They were ready to give 1 billion dollars 750 million to 1 Billion offer They denied it That their internal valuation of the company was 8 Billion This much 17 July 2007 Mark declared that he won’t sell it I’ll be it’s owner. I can find partners. But i won’t sell whole equity 24 oct 2007 Even microsoft bought some shares in 240 million dollars.
Next month, even Hongkong billionare invested 60 million dollars on facebook. Because facebook was on the top. and they needed money to expand it more. It seems easy now What are their expenses Hosting cost is the highest You are using facebook for free Uploads photo for free Everything in free But hosting cost is high How do they earn? We’ll discuss it later. In aug 2008, their valuation shifted from 3.5 billion – 5 Billion If you notice earlier they said their internal valuation is around 8 billion. Means they were futuristic. That they are growing and they wont’ sell it In the starting of 2012 they declared that they have received profit of 1 billion.
from facebook and 3.71 billion approx that they earned. means rest of the money was spent. Feb 2012 They filed themselvs for IPO Means listed themselves in share market. and their they asked for 5 billion dollar Means received this much money. In this , mark kept 22% shares For the company and 57% shares was for voting shares What do i mean by voting shares. I’ve discussed this before too In this video too Now i am dissolving my company Dissolve means I am receiving funding But The point when i have shares below 41%. It says, that below 41% you can lose the rights. and anyone can become the owner But if we can keep the decision power in our hands. Voting power. Then nobody can affect us.
Now they needed money So equity was decreasing so He was left with 22% equity If in past someone tried to be smart After buying all the eqiuity from share market. That person could have claimed that facebook is mine. Right that is not possible Mark did the right thing by keep 22% for facebook only They kept the voting shares. Voting shares decides the steps company will take. who will be owner Means CEO Director that is taken by voting committee only so they did the right thing SO if you are thinkin of expanding your company In order to maintain your equity Whatever you do , make sure you keep the voting share with you So the revenue of facebook till 30sep 2018 quarter revenue was 13.17 bilion in 2018 Let’s talk about how do they earn money? Everybody knows mode is ads. We use facebook and we show them ads.
show ads. we see the ad as a viewer and that money is their revenue. Simple Just like tv earns. same like them They created a platform where everything is free and we like using facebook. We check our friends profile. Everything And we create an image in facebook database. What kind of a person we are. After this As a Digital Marketer We run ads On that liked photo all the things you like By targeting that thing In targeting, we add location You can add age group Your position Many things So they gave so many ideas. To marketer in order to run a succesful ad. According to me, Social media is the best way for branding If you want to do good branding Social media is the best. In this, we have facebook Instagram Now facebook has their own payment method Just like Saytm One platform is Jibbigo In 2013, they acquried it What does it do? It help advertisers to run ad in multiple languages Language translations Good for digital media They acquired atlas By microsoft What does it do You reach the number of reach no. of visitorrs These things I can show you ads. You can like our facebook page and can follow us on instagram Now You can see the total reach everything by this atlas. One more platform Onavo Which compares two apps Suppose i am making an app regarding youtube Here i can compare it’s performance with youtube Whether it’s fast or slow It helps developers a lot in making apps Next acquisition Instagram In 1 Billion Dollar Logically thought about it Facebook will be toward social trend and instagram for photos. That is photo centric. App. I personally think Instagram will conquer facebook in future If you agree , tell me in the comments Next is Oculus VR Best company of VR Who makes VR.
If you use a normal VR We connect our phone and it has two glasses And we think it’s real BUt in oculus VR It has it’s own display It’s own display , graphic card and it can connected to computer as well Install game in your computer and play I’ve used it And it has many attachments If you want me to make a video on this. Tell me in the comments below. I’ll make a detailed video. Now Facebook bought for 2 billion in 2014 And in starting People never thought That gaming industry will be this much You can see on youtube itself People are growing just by playing games When i was little My parents used to scold me for playing Itt’s a waste of time Today you get paid for playing. There wasn’t anything like this in past. But now no doubt it’s a good way of earning.. In 2014, They acquired whatsapp If you don’t know whatsapp is owned by facebook In 2014 , they acquired it. In 19 Billion dollar 19! Now why did they acquire it? Because I like these personality because When they see a competition In future They immediately acquire it Facebook knew That their genre was in photos Instagram is now better than them Bought it Whatsapp Everybody use whatsapp.
Instagram is used less than whatsapp But we always use whatspp We have whatsapp for business. So they acquired it too. Recently, i read that They are thinking of integrating it. Not application but chat Instagram, facebook and whatsapp will be integrated with each other You can use it Because neither i am able to use instagram, facebook or whatsapp well. I use whatsapp regularly And sometimes i am not even able to reply everyone on whatsapp. Also to personal messages. So according to me, This integrated thing will be good. You tell me in the comments Have you ever seen I’ve told you this before too If i talk about some place on whatsapp and when i open facebook, i see ads regarding that I’ve already told you this. And many people agreed too Now Facebook says We dont sell your data We use it for internal system Whatsapp is theirs Instagram, facebook.
Track both Regarding anything. Like you need a gift for your girlfriend. And you opened facebook and saw gift ideas ads They are pro. But as a marketer, I don’t have much control towards it. Maybe big marketers have control in this If this type of targeting is going on Because i have personally experienced this. Now they say They don’t sell data of facebook. and do leak And data is leaked not by them. And because of this It’s a loss for us Our personal data can be leaked We kept that data for us. for our friends But we get a call from credit card company From where do they extract this data?