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Business model of the Facebook company

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case study
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  1. Executive summary
  2. Generation of value
  3. Compensation value
    1. Banner ads
    2. Sponsored groups
    3. The flyers
    4. Advertising in the news
    5. Gifts
  4. The distribution of value
  5. Conclusion

In February 4, 2oo4, Mark Zuckerberg left the prestigious Boston University and along with his roommates , Dustin Moskovitz and Chris Hughes, created the The Facebook. Facebook brings together more than 190 million users worldwide (600 000 new members per day) 70 % of who are from outside the United States.

Peter Thiel, the founder of PayPal, was the first to believe in the potential of this platform right from its predecessor - FaceMash. He provided $ 500 000 for the development of the company in the fall of 2004.This social network that allows millions of users to exchange personal data and communication at the time was already looked like it had a huge potential for a business model that was based entirely on online advertising.

Ever since its inception and even now, Facebook has a continuously increasing number of applications. Today there are 52, 000 and everyday, about 140 new members are being added.

Its features (like the following two) are numerous
1)writing a message on the page or "wall" of one's friends, commenting on a picture
2)subscribing to a particular group or chat in real time via an integrated messaging system

In short, the interaction between the profiles on Facebook and friends is the priority. Its aim is to consolidate and build bridges or even a community between users. It can be translated into over thirty languages. Last October the site announced that it had set up its International headquarters in Dublin in Ireland. A few days later, the company announced the that it would soon be opening an office in Paris. Is this Mark Zuckerberg's way of rewarding the assiduity of the French? They are nearly 7 million "facebookers" in France.

With its 190 million users, Facebook's business model is the stuff of dreams. However, the group's expenses increased significantly faster than its revenues did and this made the company unable to turn a profit. Facebook's business model was based and tailor made for free service for its users but this seems to be causing a problem to achieve a sufficient turnover. Thus, it appears that Facebook needs to develop its revenue streams as well as create new ones.

As we all know, Facebook is a hugely popular social networking site and in early 2009 recorded more than 190 million active users. These users, at the very least, visit the site once a month.

If the fact that it operated in English was an obstacle to non- English speaking countries, the Facebook group has remedied this by developing it in several other languages including French. This has resulted in gaining it 7 million more users in France.

Facebook allows its users to enter personal information and interact with other users. This is a web platform on which anyone can build their profile and also invite friends to register on it. One can often find old classmates or make new friends.

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