¶ … Social networking sites began in 1997 with a now-defunct site called SixDegrees.com. As of 2007, two sites dominated the industry. Myspace, owned by News Corp, is the industry leader with around $800m in revenue. Facebook was #2, with over $400m in revenue. A host of other competitors exist, but do not at present hold significant market share. Myspace has a similar array of features but is often seen as less user friendly.
Facebook was started in 2004, and by the end of the year had registered 200,000 users. Growth has continued to the point where in 2007 Facebook held a market share of 16% and over 70 million users, making it the 6th most-trafficked website. Founder Mark Zuckerberg was offered $1billion by Yahoo but turned it down.
Facebook's future looks bright at present. It is expected to break the 125 million user mark in 2008 and it is expected to be the top social networking site in 13 different countries. The company expects to launch a unified payment system that will bring e-commerce to the site.
Facebook's initial promotion strategy was word-of-mouth. The viral nature of social networking sites lends itself to this type of promotion. Facebook sees a future for itself not just as a social networking tool, but a professional one as well. They began this thrust by creating corporate networks. Revenue generation comes from Microsoft banner ads, and Facebook tailors its advertising to the user based on their network. Facebook's value as a business tool is being harnessed as well, via applications that help track consumer tastes, and services for corporate recruiters. The primary target market for Facebook is between the ages of 22-34. The secondary target market is between 35-54.
The strengths are that it is addictive, has a clean layout is open platform and is a real-world network (unlike Myspace). It has relatively few weaknesses, other than low revenue per user. Threats are other social networking sites, instant messenger services and photo sharing sites. There are opportunities in new markets and for a more fully-integrated platform.
Through our ads we want to efficiently reach our target market so they become more aware of Facebook. We want to build familiarity with the site in a market that has not traditionally understood the benefits of social networking sites. The goals are more sign-ups and an increase in the frequency of visits to the site.
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