Facebook's 4 Biggest Risks

Facebook, whose stock is trading on public markets for the first time today, has had an incredible rise - from zero to 900 million users in just over eight years. In the fast-changing technology world, though, today's Facebook can quickly become tomorrow's MySpace. Make no mistake: Everyone's favorite social network faces substantial… 

 

 

 
 
Facebook, whose stock is trading on public markets for the first time today, has had an incredible rise - from zero to 900 million users in just over eight years. In the fast-changing technology world, though, today's Facebook can quickly become tomorrow's MySpace. Make no mistake: Everyone's favorite social network faces substantial risks. Here are a few.

Missing the Boat on Mobile

Facebook's biggest driver of usage - and revenue - comes from the old, desktop-PC web. But as people start spending more time on mobile devices, and more people get online for the first time only on mobile devices, Facebook could lose its edge. The biggest risk, then, is the rise of a mobile-only or mobile-first social network that steals the attention and hearts of its users.

The good news: For now, Facebook is doing pretty well on mobile devices. It has more than 500 million mobile-active users as of last month; more than half its users. It recently acquired Instagram, a mobile photo-sharing network, previously one of its biggest existing threats. There's also a potential upside: If Facebook were to become a mobile platform - the way Apple's iOS and Google's Android are - it could open doors for many future businesses.

But that's also a big challenge. And right now, Facebook's mobile products aren't exactly great. Facebook's iPhone app, for example, is slow and uninspired.Something better may come along that Facebook can't beat, clone or buy. Meanwhile, Facebook admits in its IPO filing that it does not "currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven."

Growing its Business Beyond Advertising

The vast majority of Facebook's revenue - 85% last year - comes from advertising: Those little ads you see on the right side of your Facebook window. It's a decent business, with $1 billion in profit last year, but it's not a killer business.
The big question is whether Facebook will be able to build additional revenue streams as big as or bigger. To make a Microsoft analogy, Facebook has its Windows, but can it find its Office?

Google, for what it's worth, hasn't been able to build another business as big as its ad business. But it hasn't needed to yet. And there's a big difference between Google's ads and Facebook's ads, as startup investor and founder Chris Dixon explains in a recent blog post.

"The good news for Facebook," he writes, "is there is a lot of room to target ads more effectively and put ads in more places. The bad news is that, if there is one consistent theme in both online and offline advertising, it’s that ads work dramatically better when consumers have purchasing intent. Google makes the vast majority of their revenues when people search for something to buy or hire. They don’t have to stoke demand – they simply harvest it. When people use Facebook, they are generally socializing with friends."

Will Facebook figure out how to put its ads near a service where people have more purchasing intent? A social search engine, for example? Or will Facebook's payments business - 15% of its sales last year - grow to become bigger than its ad business? It will probably be years before those questions find answers.

Losing its Leadership and Recruiting Edge

Facebook has already weathered significant staff turnover: Many early employees, already rich from the company's success, have left to do other things, such as starting their own companies or becoming professional investors. Facebook has, for the most part, been able to recruit good replacements. With Mark Zuckerberg at the helm and COO Sheryl Sandberg as deputy, Facebook has seemed stable for years.

But Sandberg is about to become a billionaire. Many other employees will become millionaires. And the recruiting lure of pre-IPO shares is gone. Will Facebook be able to keep its leaders and continue recruiting the brightest engineers at reasonable prices? Or will it gradually lose out to competitors?

All the Small Things

Those are three big risks for Facebook. But in its IPO filing, it lists many others, some large, some small. These include: Failing to keep or attract new users; failing to introduce new, improved or popular products; potential for concerns over privacy, safety or security; technical problems (a big challenge for MySpace and Friendster that helped Facebook leapfrog both); and loss of advertisers.

In general, things seem to be going well for Facebook, so it's not as though users, fans, employees or investors should be particularly worried. But it's important to keep an eye on the risks and the competition. In this industry, for a site that has grown as fast as Facebook has by blowing past competitors, it's important to bear in mind that what goes up can easily come down.

How Does Facebook Make Money?

Facebook's first few days on the stock market are in the books: Shares closed Tuesday at $31, down significantly from their $38 issue price. You may wonder: How does Facebook make money? Sure, 900 million users and billions of photos, but how is this a business? It's pretty simple, actually.

 

 

 

Facebook's first few days on the stock market are in the books: Shares closed Tuesday at $31, down significantly from their $38 issue price.

You may wonder: How does Facebook make money? Sure, 900 million users and billions of photos, but how is this a business? It's pretty simple, actually.

The majority of Facebook's business is advertising: Those little ads on the right side of the Facebook screen.

The first three months of this year, Facebook sold $872 million worth of advertising, or almost $1 per user. That represented 82% of Facebook's sales, which sounds like a lot. But it's actually down from 85% last year and 95% in 2010.

The rest of Facebook's business is payments and "other fees": Mostly selling Facebook credits, which people use in games like FarmVille.

The first three months of this year, Facebook's payments business generated $186 million in revenue. That's about 18% of Facebook's overall sales, up from 15% last year and 5% in 2010.

(Beyond taking a cut from Facebook payments, the company generates revenue "in connection with arrangements related to business development transactions and fees from various mobile providers," but it says this line of business has been "immaterial" recently.

Expect the payments business to continue to represent more of Facebook's overall sales, as it looks to diversify away from advertising. Ads will likely generate most of Facebook's sales for a long time, but maybe not forever.

A Guide to Facebook Insights

Over a billion served, and we’re not talking burgers here. Facebook has evolved from being a place to chat with pals to a powerful business tool. Keep in touch with your customers or even sell your latest product, all from the familiar pages of Facebook. But lots of companies, especially smaller ones, struggle with how to define success when it comes to Facebook. Does this sound like you?

If so, listen up! One of the most important tools you need to start using is Facebook Insights, the platform’s free built-in analytics package. Insights has been around since 2009 and originally only collected basic demographic information of a page’s fans during the sign-up process. Over the years it has evolved into a more robust measurement tool that most pros find vital to their Facebook marketing success.

Here are some of the key things you can learn with Facebook Insights.

How Well are Your Posts Doing?

The “Overview” section shows you how each individual piece of content is resonating with your audience, as well as how you’re doing over time.

You can view how many people saw the post (“reach”); clicked on the
 post (“engaged readers”); liked, commented on or shared the post (people “talking about this”); and what percent of the people who saw the post also liked, commented on or shared it (“virality”).

This information can quickly and easily tell you what type of content is engaging your existing audience and flowing over to new potential “likers” of your Facebook Page.

You’re also able to review all your post types together or use the pull-down menu to dig deeper into specific types of content. In other words, you can view per-post analytics only for posts with photos, links, videos, questions or offers. This really comes in handy when you are trying to determine what type of content your community craves most.

Who Likes You?

Insights allow you to get demographic and location information about the “likers” of your business’s Facebook Page. You can get valuable details like gender, age, country/city of origin and the language they speak.

You can also see a breakdown of what sources your new likes are coming from, as well as how many people unlike your Page. These stats can help you deliver targeted content to meet the needs of your audience.

Who Are You Reaching?

While the “Likes” section provides demographic data of all your “likers,” the “Reach” section offers demographic information on the folks who saw your content – which Facebook defines as people you’ve “reached” – during the last seven days.

Note that the percentages may not add up to 100 exactly, because some people do not disclose whether they’re male or female or where they’re from on their Facebook profiles.

This section also provides details 
on how you reached these people: organically on their news feed (“organic”); by way of a sponsored or advertised post that you paid to do (“paid”); or through the action of a friend (“viral”).

In the “Visits to Your Page” section you can see how many times your Page was viewed on each day for the last month. If you have tabs on your Page, it also shows your most-viewed tabs for the last month.

“External Referrers” is a great way to see where people are coming from, in terms of other websites, in the last month.

Who’s Talking About Your Page?

Insights also provide demographic information on the people who’ve liked, commented on or shared one of your posts – which Facebook calls people “Talking About This.” You can set it to show data from a specific time period.

In addition to knowing their gender, age, where they live and what language they speak, you can see how many unique people engaged with your content within your defined time period. The “Viral Reach” chart shows how many unique people saw your post(s) because a friend engaged with your content.

Export Data to Spreadsheet

To go even deeper with the analysis of your Page and content, Facebook provides a handy feature that allows an admin to export Page level data or post level data for a selected date range.

When it comes to your Page level data, some of the data points that you should pay close attention to include: People Talking About This, Page Engaged Users, Total Reach, Organic Reach, Viral Reach, Total Impressions, Organic Impressions, Viral Impressions, Negative Feedback from Users and Page Consumptions.

When you export your post level data, you’re able to get to a granular level that is just not possible when viewing the top-level content analytics. You can really hone in on the Total Reach, Organic Reach and Viral Reach as well as the Total Impressions, Organic Impressions and Viral Impressions of all your posts. You’re also able to see the lifetime count of likes, comments and shares of each post.

As with all things Facebook, Insights is getting an update, with easier to read analytics and a new People Engaged tab for more specifics on your Page visitors. The new update is currently in beta, but when it becomes more widely available we’ll get the scoop and fill you in on everything you need to know.

Once you’re ready to move beyond the number of Likes on your Facebook page, try exploring Insights. You may be surprised at what you find about your visitors and how it can help you make your Facebook Page be the best it can be.

Facebook Introduces Embedded Posts

Have you ever wanted to post a Facebook status update, picture, video or conversation in its entirety to a blog post or a website? Facebook, the social media giant, just announced they’re now rolling out embeddable posts.

Embedding a Facebook post works similarly to Twitter or YouTube in which you have the option to click “Embed post” from a menu and an embed code will be provided. This code can be copy and pasted into your website or blog post’s HTML. Facebook posts must be set to “public” and your Facebook profile or page must be enabled in order for the embed codes to be provided.

Dave Capra, Software Engineer at Facebook also noted on their website that “When embedded, posts can include pictures, videos, has tags and other content. People can also like and share the post directly from the embed.”

Embedding posts is a popular method amongst journalists, news organizations and bloggers, allowing them to share content in a timely and dynamic manner.
Currently, CNN, Huffington Post, Bleacher Report, PEOPLE and Mashable all have embedding rights with “broader availability coming soon.”

Facebook shared this example from the official British Monarchy Facebook page. “You can click the #RoyalBabyBoy hash tag directly from the embedded post to discover similar content on Facebook,” says Capra:

I Sold My Company Today

Today, we announced that we were acquired by a wonderful company. And, I have to admit it's with mixed emotions that we sell right now.

 

Today, we announced that we were acquired by a wonderful company called Deluxe Corporation. And, I have to admit it's with mixed emotions that we sell right now. We're on the cusp of a brand new product (coming soon!) and we're geared for greatness all on our own.

So Why Sell?

I've always told our employees, our loyal investors (12 years loyal) and even our customers that one day we'd find the right match with a company that valued us for our ability to:

1. Be experts at what we do with our talented team
2. Acquire and retain small businesses worldwide
3. Be profitable for many years while still being able to invest back into the company to grow

In my opinion, if we found a company that would value us for all of these things, want to acquire us and pay us what we're worth, then all our shareholders would benefit. After all that's where my responsibility lies. (Did I mention it's 100 times harder to take money from your family and friends than from VCs or a bank?)

Over the course of 12 years, we've had many conversations-- and I mean many. Companies big and small, public and private, too many to even think about. And every time we walked away from a conversation, it was because the company didn't value us for our abilities and wouldn't have given our shareholders what they deserve.

But this one was different. It was great; it was time and it was perfect.

So I had to weigh it all, taking care of customers, employees and shareholders. And with a great brand like Deluxe and millions of small business that trust them with services that help their companies grow, it felt like the right thing, at the right time and the right way to take care of everyone.

The Next Chapter

Deluxe shares our long-term vision of being the best destination for small business marketing. This gets them even further and with our acquisition they come closer than ever to completing a pretty cool picture.

Put simply, we got acquired by a company that wants small businesses to save time, money and ultimately work happy and that's a goal we can easily get behind.

And, to my much-loved VerticalResponse employees, this is going to be pretty fun. Now we've got 4 million customers that might just need our services; are you ready? I am! Let's do this!

How to Make Money on Facebook

Is your Facebook page a real snoozer? You won't make much money that way! Even the smallest business can make money on Facebook. Here's how.

 

As a small-business owner, you probably don't have the resources that a large corporation employs for online advertising campaigns, but social media consultant and author Brian Carter says that even solopreneurs with limited funds can gain the competitive edge in this vast cyber-arena.

"For years the Internet has provided us with the wildest opportunities that haven't been very competitive or expensive," says Carter. And with all of these options available to us, Carter is most passionate about Facebook advertising.  "It provides us with the biggest opportunities—it's a great place to profit," he says.

"Advertising on Facebook is the biggest opportunity for businesses large and small," Carter says.  "What Facebook advertising does, which is great, is to allow you to reach a TV-sized audience, locally, nationally and even internationally, and still target it the way you would in any internet marketing campaign, yet start with just five bucks a day. To me it’s revolutionary because businesses can reach an audience they couldn’t have ever reached before."

If you've jumped into the Facebook frenzy, like millions of business owners, by creating a Facebook page: congratulations—but that simply isn't enough. "There are a lot of problems with pages," Carter claims. Recently, he combined efforts with EdgeRank Checker and found that the average page across 4000 pages is only reaching 17 percent of their fans. So if you have 100 fans, you may only be reaching 17 people with all of your hard work! "The downside of the page is that you're not visible to all of your fans," says Carter.

Like any marketing campaign, it's apparent that you need a strategy before you launch your page. So how can a small business benefit from what Facebook has to offer? Here's what I learned from my conversation with Carter. And I'm learning much more from his most recent book release, The Like Economy: How Businesses Make Money With Facebook.

• Combine your Facebook marketing plan...
  ....with the strategies that you are best at. If you're good at e-mail marketing, for instance, use Facebook ads to get more e-mail subscribers. If your website converts traffic really well, use your page to drive traffic there. Always plug into what you already know works well for your business.

• If you're growing fans through Facebook advertising...
  ...get people to click "Like" right on the ad. You will get a lot cheaper fans that way than if you send them to a fan page through your ad. If you run an ad that sends people to a custom tab because you want to get an opt-in, that's the same thing as sending them to another website, and you may not want to do that. Not everyone will put in their e-mail and click like so you are dividing your efforts. Decide first if you want fans or e-mail subscribers. If you want fans, don't send them directly to a custom tab.

• Think of your page as a social e-mail.
  There's a chance that followers will see your updates in their feed, but you have to really capture them within your first few posts. There are parallels to e-mail in this strategy; not everyone will open them. If you get a 30 percent open rate, you're doing great. On Facebook you can use the same strategies to do really well. The difference is that with e-mail marketing you don't want to send out e-mails everyday or you will lose your subscribers.

• If you're not sure...
  ...whether the greatest benefit will come from sending people from your ad to your site, your Facebook opt-in page, or gaining fans through prompting them to click "Like" right on the ad, test them all! See how much it costs you to acquire a fan, and how much traffic you get from those fans, versus the cost of acquiring an e-mail and the ROI on that e-mail address.

• Engage with your fans in your posts.
  Don't make every post a call to action. You want to turn the folks who like your page into true fans of your brand.

• Boring Facebook pages won't get you far.
  If your business isn't something that most people would consider exciting, like culture, lifestyle sports, animals, dating, kids – or anything that people get gushy about—go the opt-in route rather than the fan marketing route.  If your business is attractive to many consumers, use pictures in your ads to entice them to click like. If your brand allows you the creative freedom to toss in a picture of a puppy, cat or baby, you’re golden! People will click on your ad.

• Remember one of the key differences...
  ...between using AdWords and Facebook advertising. That is, in order to generate revenue through online advertising, you must reach the right people, with the right message, at the right time, with the right offer. It's possible to do this with AdWords and Facebook ads. The main difference is that AdWords is about fulfilling demand: finding the small set of people who are ready to buy, or very close to it, and capitalizing on finding people at that stage of the sales funnel. With Google you are targeting people by what they are looking for. With Facebook  you are targeting them by who they are and what they like. These are people who are likely to buy from you at some point which is a larger group of people. There's more sales potential overall. But be careful not to spend too much money on people who are going to wait three or four years to buy, unless you have a sales cycle that is naturally that long. But you may be able to get them to buy sooner than they would have by posting enticing posts or with compelling conversion practices on your website.

• Facebook page insights...
  ...can be a great resource to learn about your audience. You'll find this tab on your admin panel on Facebook in the left hand column. Look at the graphs that tell you how many people are liking you per day, how many people are talking about you, sharing your posts, etc. Notice what type of posts get more engagement than others and create more like them. Know your audience, put yourself in their shoes and engage them!

In light of Google's new Search Plus Your World, I couldn't resist asking Carter if he thought Google+ will give Facebook a run for its money anytime soon."Google+ can become big if it becomes more sticky—if we can enjoy using it more," Carter says. "Right now it's all the early adopters on Google+. It's not really an opportunity for most marketers because there is not enough of a general audience there. Google+ has to be more fun to use to attract that audience.Search Plus might be a strong-arm tactic to try to force it to happen faster."

He continues: "It certainly could be a big deal at some point but there are phases of adoption of something new—like Facebook was in 2009. There aren't enough people on it in this phase to do any real marketing. But once it reaches enough adoption the network effect happens. You can reach more than half of the United States with Facebook ads, and Google+ is just not there yet."

Social Media Sites to Earn Money

Technology has changed the lives of people in a big way. This allows them to gather information from all over the world and keep in touch with friends and their relatives through the Internet, especially social media really was a revolution.
In recent years it has evolved from a fun and gossip among friends games a useful role in bringing political changes across different countries. But one aspect of social media is still neglected by many is the economic turnaround that resulted in people’s lives.

Now you do not need to have a large sum of money to start a business. You can do it with a computer and access to social networking site.
Now we need to look at the impact of different social media sites change people’s financial destiny.

Facebook

Can rightly be called Facebook springboard is a social revolution.It also has become a source of making some serious money for people. Now it is being used to promote blogs, websites, businesses (especially small businesses). People who do affiliate marketing even use it as a promotional tool.
Many national with extensive marketing network also benefiting from Facebook by creating pages of their products or services and put their advertising content.
All this is done without spending a single penny. On the other hand we have sites like Zazzle “working together with Facebook. You can create and design a product in Zazzle ‘without paying anything and then sell it on Facebook. Other sites, such as Blaster music site and use the same concept as’ Zazzle.

Google+

There is not much difference between Google+ and other social media sites, except for the fact that you can create circles of people belonging demographics and different cultures and target them marketing messages to order. This is a nice way of determining what works for them.
You can also create a group on Google Plus Like as you made Facebook fan page to market your product. Here you can provide the details of your products or services, along with reviews and coupons.
People are good at programming can also create an app to Google and submit it to Apple iOS and Android Market. If your app is liked by users, it will download the software to a large number.

Twitter

Emphasizing the importance of Facebook, you can not forget Twitter. With millions of users worldwide, it provides a great marketing you promote your website or blog.
But the foundation reinforcement, your followers is of utmost importance while thinking of making money on Twitter. Waiting for your higher, the higher your chances is to make it big on Twitter.
Affiliate marketing is also made easy by Twitter. You just need to sign up with an affiliate marketing website and choose a product to promote. You can then create a blog post with some landing on it. It can be your gateway to making money on Twitter.

LinkedIn

LinkedIn is different from other social media sites in which it is primarily for professionals to connect with each other. It helps professionals classifying the problems in a big way. You just need to create a ‘Group’ in LinkedIn where different professionals can come and share their knowledge.
Another feature that is essential to the professionals’ recommendations. ” You can put the recommendations of your job or business clients and your peers. It is helpful to anyone looking to expand their business and are willing to reach new heights in their career their.
Let us know your views in the below comments.