In the days leading up to Facebook's IPO launch many were interested in how Facebook was going to perform. In fact this is one of the most talked about IPO launches since Google. Many said Facebook was going to be the next big thing, some of the more optimistic analyst even predicted Facebook to shoot up over 50% on its first day. Alas when the IPO launched last Friday, Facebook barely nudged past their $38 opening.
So what does this mean?
So what does this mean?
Well if you are Facebook you may be disappointed but you won't be crying any salty tears. The company was still able to raise 16 billion dollars from their IPO which makes it the which makes it the largest public offering in the United States for a technology stock. Probably the biggest reason that Facebook didn't shoot up more is because of investor confidence being down in a slumping financial market. Also, for years several articles and documentaries have questioned how does a social website implement a profitable business model?
The company has been able to thwart away most criticisms by implementing a successful online advertising and third-party publishing system into the site. However GM, one of Facebook's largest advertisers, recently pulled out of Facebook Advertising. On top of that Zynga, the largest third-party gaming publisher on Facebook, is trying to get it's users to not play as much on the social media network. This leaves many analysts questioning just how successful Facebook can be in the long run.
Now that Facebook is a public company, there will be more pressure from investors to make sure the company is hitting its profit and growth margins. But will this pressure hurt the Facebook users?
It is my belief that Facebook will start increase its efforts to acquire businesses so that it can grow and not jeopardize the user experience. My advice to Facebook is to acquire businesses that offer a product/service similar to what Facebook offers, and can be profitable in the long run. I believe Instagram, a recent acquisition by Facebook, meets this criteria and was a very good purchase overall.
Don't get me wrong, I still believe that Facebook has potential to make the social website more profitable and continue its growth period in the product lifecycle. For example, with it's 800 million users Facebook has the opportunity to try implementing a search engine system similar to Google. Also, the social network could try to integrate an e-commerce website that specializes in online goods such as e-books, digital music, and computer applications.
Facebook is now approaching the most critical phase in the company's history. It will be interesting to see how the organization will rise to the challenge.
The company has been able to thwart away most criticisms by implementing a successful online advertising and third-party publishing system into the site. However GM, one of Facebook's largest advertisers, recently pulled out of Facebook Advertising. On top of that Zynga, the largest third-party gaming publisher on Facebook, is trying to get it's users to not play as much on the social media network. This leaves many analysts questioning just how successful Facebook can be in the long run.
Now that Facebook is a public company, there will be more pressure from investors to make sure the company is hitting its profit and growth margins. But will this pressure hurt the Facebook users?
It is my belief that Facebook will start increase its efforts to acquire businesses so that it can grow and not jeopardize the user experience. My advice to Facebook is to acquire businesses that offer a product/service similar to what Facebook offers, and can be profitable in the long run. I believe Instagram, a recent acquisition by Facebook, meets this criteria and was a very good purchase overall.
Don't get me wrong, I still believe that Facebook has potential to make the social website more profitable and continue its growth period in the product lifecycle. For example, with it's 800 million users Facebook has the opportunity to try implementing a search engine system similar to Google. Also, the social network could try to integrate an e-commerce website that specializes in online goods such as e-books, digital music, and computer applications.
Facebook is now approaching the most critical phase in the company's history. It will be interesting to see how the organization will rise to the challenge.
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