Facebook Swot Analysis

Topics: Facebook, Social network service, Display advertising Pages: 7 (2072 words) Published: December 25, 2012
Facebook Inc. is a social network platform, which enables users to share ideas, opinions, pictures and activities. The company primarily operates in the US and has presence across the world. Facebook is headquartered in Melno Park, California and employed 3,539 people by the end of March 31, 2012.

The company builds products that support social networking and provide utility to its users, platform developers, and advertisers. Facebook users utilize the company’s products to stay connected and share content. Developers use the Facebook platform to build applications and websites that integrate with Facebook. Advertisers use the company’s products to engage with users on Facebook or subsets of the company’s users based on certain information such as age, location, gender, or interests. Facebook had 901 million monthly active users and 526 million daily active users on average in March 2012.

Facebook’s products for users are centered on building the tools that enable users to connect, share, discover, and communicate with each other. The company’s products for users are free of charge and available on the web, mobile web, and mobile platforms such as Android and iOS.

Facebook has come a long way in eight years. What started as a social network exclusively for Harvard students has quickly evolved into a global phenomenon rapidly approaching one billion active users. Beyond personal use, businesses have deemed Facebook an important way to reach current and potential customers.

Facebook was founded by Mark Zuckerberg with his college roommates and fellow students Eduardo Saverin, Andrew McCollum, Dustin Moskovitz and Chris Hughes. In October 2003 Harvard student and coding whiz Mark Zuckerberg created Facemash and nearly got expelled for his efforts. In January 2004, Zuckerberg started writing code for a Harvard-only social network, which launched in February 2004 as "thefacebook." Soon after, three Harvard seniors accused Zuck of tricking them into thinking he would help them create a social network called HarvardConnection.com. Subsequent lawsuits were settled, and the major players involved became fabulously wealthy.

Facebook proved an instant hit at Harvard and soon expanded to more universities across the United States and Canada. In 2005 it expanded to high schools and employees of select companies, including Apple and Microsoft. The following year the site opened its doors to everyone at least 13, and Facebook as we know it today was born. The social network had 12 million users by December 2006.

No longer a private club, Facebook quickly attracted users of all ages. Between August 2008 and April 2008, the social network doubled its number of active users from 100 million to 200 million. Using Ben Mezrich's 2009 book The Accidental Billionaires as source material, director David Fincher and screenwriter Aaron Sorkin crafted "The Social Network," which was released in 2010.

By the end of March 2012, Facebook claimed more than 900 million monthly active users. Facebook launched its initial public offering in May 2012 and the stock traded in NASDAQ under the FB symbol from the same month.


Strong market position provides favorable competitive environment Facebook enjoys formidable position in the industry it operates in. Among the social networking sites, Facebook enjoys strong market share of visits. According to the industry estimates, the company had 63.2% share of visits in March 2012. Its nearest competitor YouTube had 20.3% share while Twitter had a mere 1.7% share. The company has successfully displaced many of its competitors. Facebook overtook several rival social networks including Bebo in the UK, Friendster and Myspace among others.

Facebook enjoys a leading position in the US online display advertising market, which includes spending on online video, sponsorships and media advertisements. The industry estimates indicate that, Facebook’s...
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