It’s All About Growth for Facebook
Posted by Nick O'Neill on October 10th, 2008 9:00 AMEarlier this week Sheryl Sandberg, Chief Operating Officer of Facebook, had an opportunity to address an audience at the American Magazine Conference. At the event Sandberg highlighted many of the challenges for Facebook that have been covered numerous times on this site. First and foremost, “Users are not on Facebook looking to buy something” while on Facebook. Sandberg also suggested what is widely known and that is “We need to find a new model and new metrics.”
In an interview the following day with German newspaper Frankfurter Allgemeine Zeitung, Zuckerberg suggested that monetization is still not a core focus at Facebook. Why? Well aside from the fact that the company has millions of dollars in the bank it just isn’t important to them currently. According to Zuckerberg, “In three years from now we have to figure out what the optimum model is. But that is not our primary focus today.”
One other interesting note that Zuckerberg makes is that he believes social networks could cannibalize e-mail. This only leads me to wonder why on earth the company hasn’t come up with a better messaging system. I receive an increasing number of messages on Facebook and it only becomes more challenging to respond to. Ultimately I think they’ll resolve this problem eventually but I surely hope it comes sooner rather than later.
One final interesting component of Zuckerberg’s interview with the German newspaper was in response to a question regarding his business relationship with Sheryl Sandberg. He states, “She is an excellent manager. She is very good in building our international organization. I’m focused on the direction of the company, especially of the product development, and the overall strategy.”
Many interpreted that to be an insult to Sandberg. Others claim that it was a poorly translated statement. I’m not quite sure how you can screw up the translation when the interview was in English. Anyways, I’ll leave readers to judge what Zuckerberg meant by this statement. For the time being, don’t expect Facebook to announce any revolutionary monetization services … they’re focused on growth.
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October 10th, 2008 at 10:26 am
I have yet to see any explanations as to why the layout for facebook was changed. I'm assuming that the new format caters more, somehow, to the variety of marketing banners throughout the website.
Evan
October 10th, 2008 at 11:58 am
The layout was changed because somebody had an idea on how to improve it. If anything the new layout has been damaging to ad revenue since you don't have to do as many page reloads. Like they keep saying, Facebook is trying to make a great product at the moment and will figure out how to make money later.
Because the new layout is absolutely brilliant. Sorry for the little learning curve, but it's far more advanced.
October 10th, 2008 at 1:23 pm
If I might quote part of your article “One other interesting note that Zuckerberg makes is that he believes social networks could cannibalize e-mail. “
Now let me pick myself up off the floor from laughing.
Facebook purports to be a tool that allows people to stay in touch with others around them, “social networking” call it what you will. This is blatantly not the case.
I have recently been administering a successful group on facebook called “bounce your balls for cancer”. http://www.new.facebook.com/group.php?gid=23456...
It is an organisation which raises funds for mens cancer charities and also raises awareness generally.
To grow the group I have taken an innovative approach (innovative as it has never happened to me) and started to send people a thankyou message when they join the group. This seemed like a very “social” thing to do and in doing so I also ask them to share the group with others if they wish to do so.
I have now received an “official warning” from facebook that they believe I am spamming people and if i'm not careful I'll get banned / account disabled.
How ridiculous!
Sure I could send out a message to the entire group and within it thank those people who've recently joined however that's spam as ppl only need to be told thankyou once. anything that is not relevant is spam, end of story.
Now, if facebook could introduce a function that allowed an auto message to be generate to ppl joining a group or fan page and I could place the thankyou text within that etc. that would work. I can have autoresponders for my email why not facebook? there you go facebook another idea for your Developers, where do i pick up my shares from?
I really don't believe that their messaging system and the awful chat functionality will develop sufficiently to eat into the market share of email and messaging platforms.
I am also finding that more and more facebook is just another broadcast tool for people who want to shout at potential customers rather than engage in dialogue / conversations
Mike Ashworth
Marketing Coach and Consultant
Brighton and Hove, Sussex, UK
October 10th, 2008 at 10:18 pm
On man's marketing is another man's spam. Why the hell would I want a thank you message by joining your group which is effectively a notification of an action I took on facebook?
October 13th, 2008 at 8:40 am
That is very interesting to hear that their main focus currently is growth. growth is always important but generating revenue is equaly as important. I'm sure facebook has some amazing ideas in their pipeline to increase market share.
October 16th, 2008 at 11:08 am
Two things:
First, I agree that social networks will cannibalize email. The evidence of this is the proliferation of private Twitter-like networks (Yammer, Present.ly, etc.), whose sole purpose is to reduce email clutter via more efficient group-based conversation.
Second, I feel like a game-changing play is in the works with Facebook Connect. As we watch the experiment play out (see http://connect.redbullusa.com - try it out), the notion of bringing my network along with me where ever I go is pretty exciting. Think Verizon commercial! I, we will see what our friends think about products and services as we move through the Web. We'll stop having to add friends to every new network we find. It will be easier on us, but I suspect it will require some cash from websites seeking to be Facebook-enabled! In other words, I'm picking up the faint smell of a revenue stream!
Enjoyed the article!
October 16th, 2008 at 11:18 am
Two Things:
First, I agree that social networks will cannibalize email. The evidence for this is the proliferation of internal Twitter-based networks (e.g. Yammer, Present.ly, etc.), whose sole purpose is to reduce email clutter via efficient, group-based conversation.
Second, I am excited about the potential of Facebook Connect. If you haven't seen it, check out http://connect.redbullusa.com. This is like the Verizon commercial where their network is always with you. So, at Redbull, once you are connected, you will see your friends from Facebook. Any comments you make or activity on Redbull will appear on your Facebook page. It means that as more websites use Connect, we will do less work assembling a network of our friends from site to site. I think what I am smelling is the faint smell of a revenue stream! Websites are going to want to be Facebook-enabled. As in welcome to our store, and thanks for bringing 50 of your friends!
Good work on the article!