Both money and relationships are vital for sustainability, yet it is money that has been the main cause of many broken relationships. It is souring Facebook’s too, with its 900+ users. Will they run away from the new monetization schemes as investors did, post IPO?
Investment risks
Facebook’s first angel investor and member of its board of directors, Peter Thiel recently sold most of his Facebook shares as the company’s stock fell. For companies, hedge funds from those such as Thiel, are a security boon because of their sizable investment that cannot be liquidated the first year. Mutual funds being more common tend to retreat in large numbers the moment stocks drop. Both situations are deadly for a company. And that’s the kind of pressure Facebook is currently faced with.
New investors are therefore hardly encouraged.
Relationship risks
In response, Zuckerberg seems torn between pleasing his users and investors. CEO Mark Zuckerberg has admitted to his company’s volatility.
And so we witness the revival of Facebook Gifts, first featured two years ago and subsequently shut off because it proved profitless. This time around, Facebook’s commerce initiative could work for users who see it as a way to increase their bonding with their friends via the network. This is still not as risky as some other ventures, such as advertising, no longer a free service.
Marketing with different rules
COO Sheryl Sandberg has made it plain that payment will also be required to access additional features provided by the network. The strategy is similar to how other social networks operate, but considering this to be a free for all network, new users will think twice before joining Facebook, while current users may reconsider staying put on the network.
It is clear Facebook is not cut out for the cut-and-dry advertisers and all attempts have been fruitless. The pressure has led to privacy violations and protests from users. Despite that, Wall Street Journal reports how the social medium continues to provide internal as well as external user data to marketers.
Facebook asks users to verify their real identity through their phone numbers. Now marketers can target customers by matching Facebook’s email and phone numbers with their own lists. And yes, these companies have also received enough ROI to continue on this path. But users are displeased.
Apps and mobile are perhaps the only two ventures that to count on, both as user and investor attraction. Facebook apps and Facebook Fan pages require little investment and returns are high. Mobile app ROI are even higher, with small and medium sized businesses showing keen interest in making their presence felt on both platforms. Both combined as Facebook mobile apps could produce impressive numbers. This means rather than seeing users as consumers Facebook can focus on mobile companies and Facebook developers as their partners. Organic advertising will bring relief to all.
Hakim Sadik Found this Post on Avenuesocial
Hakim Sadik exponentially improves the reach of Businesses and Online Marketers. A social media expert, Sadik, is the insightful leader of Avenue Social’s client service team. Sadik has helped over 1000 clients bring their social media and mobile applications to life.
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