Facebook Moves into E-Commerce
Company analysis
Facebook company is the currently leading online social networking and social media
platform with its headquarter at Menlo Park in California. It mainly enables its clients to
connect and communicate, and allows sharing of photos, ideas, videos, and supports other
online activities. The company was established in 2004 by Mark Zuckerberg and, since has
experienced increased development and expanded since its introduction to the market. Since
its creation and introduction to the market, the firm has grown to host more than three billion
users and presently is ranked as the utmost popular social media platform globally (Musonera
& Weber, 2018). Further, through its growth, electronic advertising has been the main source
of the company’s revenue; nonetheless, the societal change from e-commerce to m-commerce
has placed substantial pressure on the such platforms to adapt to the changes swiftly. For a
while, Facebook has effectively incorporated both pop-ups and banner ads to its desktop
application; however, with the innovation and development of smartphones, the company
was forced to change its concentration to the generation of mobile-friendly ads.
The company opted to the application of pop-up and banner ads in its mobile version,
though there were certain concerns regarding the influence it could possess on the ease of use
for the clients. As a result, the company resolved to rather directly post advertisements in the
user’s newsfeeds. However, this was perceived to be a perilous strategy, though due to the
design’s simplicity, the change between desktop and mobile advertising was unified and
enabled the advertisers to send a single advert used in both setups (Brown-Peterson, 2017).
Besides, this risky strategy by the company offered it competitive advantage and ensured its
leading position in the industry, especially in mobile adverts, which, in turn, was followed by
other organizations as an effective strategy.
Additionally, due to the company’s mobile ad resolution, the firm has multiplied its
advertisement revenue within the past years. The increment in revenue witnessed has enabled
the company acquire rival social media platforms such as WhatsApp, Instagram, and Oculus
VR. Also, the company has partnered with other platforms that connect the client’s
credentials on Facebook with the partnered media platforms such as Spotify, Instagram, and
Pinterest. These attributes combined with extremely accurate and detailed market study via
data mining has allowed the company to establish a product that is personalized to all of its
The company has faced numerous challenges ranging from change in the clients’
preferences to the increased technological advisements and innovations in the market. While
the company has significantly transformed social networking, though it did not achieve this
without encountering certain challenges. Recently, the ad revenue that Facebook primarily
depends on has diversified with the increment in the accessibility of social networking on
mobile devices. As the organization developed its domain on the foundation of e-commerce,
shifting social preferences to m-commerce endangered the revenue strategy of Facebook.
According to Guadagno et al. (2016), only around 79% of the social media consumption
within the US took place either through the use of tablets or social media. With such a
reduced percentage of the users accessing their Facebook on mobile devices, the company
required to come up with an innovative way to earn more advertising revenue from the
mobile platforms.
Another challenge that the company is facing is attributed to privacy issues. The
problem of privacy was first encountered in 2006 with the introduction of the News Feed that
included all the changes that a user’s friends had made to their pages. Although the company
has attempted to resolve the issue by implementing the privacy control that allows the users
to control the content that appears in the News Feed, the issue developed with the launch of
Beacon, which the users considered to encroach on their privacy.
Brown-Peterson, A. J. (2017). Successful Facebook marketing strategies by Missouri small
businesses: A qualitative case study (Doctoral dissertation, Northcentral University).
Guadagno, R. E., Jones, N. M., Kimbrough, A. M., & Mattu, A. (2016). Translating social
media psychological research. Translational Issues in Psychological Science, 2(3),
Musonera, E., & Weber, J. M. (2018). Analysis of Marketing Strategies in the social media:
Facebook Case Analysis. Journal of Marketing Development &
Competitiveness, 12(1).

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