Everyone will agree with the fact that Facebook changed the face of social media. However, when Mark Zuckerberg, the CEO of Facebook decided to issue public shares, many started evaluating the prospects of Facebook growth. Prior to its decision of initial public offering (IPO), a study pointed out that its phenomenal growth had started receding. The growing membership at 845 million active users on a monthly basis, which the company mentioned at the IPO prospectus, had slowed down. It meant that the company’s income had also begun effecting. It was the beginning many analysts believe was enough to predict something momentous about to change.
The initial public offering was stained with controversies. A big disappointment was felt on the first day of the closing bell when Facebook’s share price fell $3.82 from its opening bell value. Though, there was hype surrounding Facebook’s first sojourn into the stock market, yet, investors were taken aback partly due to Facebook’s policies and partly due to the change in the technological scenario.
Facebook advertisement platform generates disinterest among advertisers
Facebook disallows advertisers to have sizeable advertisement banners, and secondly, it also doesn’t allow flashier advertisements. That was something, which had annoyed advertisers in the past. Also, the fact that the site’s layout discourages advertisers to get attention to their ads. The first big scare came when General motors’ decided to withdraw its $10 million commercial contract it had with Facebook.
The advertisement model of the company, which had long been the problems for advertisers, despite Facebook’s immense popularity was expected to receive a boost by the launch of its IPO. However, nothing changed much. The initial hype of the Facebook’s IPO, with the stock price rising even before the opening bell, came to a halt, as its stock price plummeted the very first day.
Though, Facebook had grown considerably, since then, its revenue had also increased, yet, people don’t seem to believe that the site will remain at its peak for too long. The social media sites carry a reputation that it vanishes faster than you can even imagine. Look at what happened to MySpace, it just went out. That’s one of the reasons why many analysts predict that Facebook is bound to fade away by the year 2020.
Can Facebook successfully go mobile?
Image credit: leaf / 123RF Stock Photo
One of the biggest challenges the company will face is its ability to integrate user’s interest in its mobile platform. The main challenge would be to bring into line the website’s tools in order to make mobile users comfortable with the site. Facebook may do many things, it has already bought Instagram, the photo sharing app on mobile, yet, to integrate its site entirely on a mobile platform, it would require more than just buying mobile apps.
The company’s ability to deal with these new technological challenges will determine how it will fare in the coming years.
Crossing the hurdle of shelf life
Every company has a shelf life as far as its popularity is concerned. It doesn’t mean that a company dies once its shelf life is over. A company with a unique product or services, or even an idea of social networking that Facebook brought to the web has to face challenges from competitors who bring the same ideas to the fore after researching and eradicating the drawbacks.
If you look at the past, there are two giants who ruled the web, Google and Yahoo. Google survived and still dominates the world of search engines. It is, in fact, but the standard measure of how the website performs around the web. Yahoo, on the other hand, has failed miserably. Its value dropped. It is exactly what Facebook needs to answer at this juncture, and that will determine how it will survive by the year 2020.
The company will have to find ways to streamline the user’s interest in tablets and mobiles. It also needs to sustain advertisers continued interest by bringing in policy changes in the advertising front, perhaps allowing advertisers to have bigger ads.
It also, largely depends on how the share prices of Facebook will perform in the stock market. If the share prices continue to fall, then the investors will eventually back out. No matter how reputable the company is, if it doesn’t have investors, it will lose its popularity. As for now, Facebook predictions for the year 2020 doesn’t seem to show positive bearings, a lot depends on how the company reinvents itself and acclimatize in the growing technological framework. Mark Zuckerberg unquestionably has a lot of thinking to do.
By Rajiv Sighamony