Social Media Tool Facebook-Business Model

BUSINESS MODEL - FACEBOOK

Facebook Inc. enables people connect, share, discover, communicate and stay connected everywhere by accessing their products. It was launched on February 4, 2004 and includes products such as Facebook, Instagram, Messenger, WhatsApp, and Oculus. Their mission is to give people the power to share and make the world more open and connected.

1) KEY PARTNERS

The Key Partners include partnerships that increase the scalability and efficiency of the business. Following are the Key Partners of Facebook:

 Content Partners – Providing content to present on the website such as TV Shows, News Articles, Photos, Videos, etc.

 Suppliers – Providing logistics such as back up electrical supply, enhancing data center capacity, advanced Micro Devices, etc.

 Acquisitions & New Ventures – Instagram, WhatsApp, and Oculus which helped in developing new business in the same industry. Acquisitions or consolidations within the industry have resulted in more formidable competitors for Facebook.

2) KEY ACTIVITIES

The Key Activities required in enhancement of the value propositions of Facebook are as follows:

 Platform Development- Ease of use of the website and its features ( Sharing photos, videos, opinions, etc. without any difficulty)

 Data Center Operation Management- Leasing data center capacity, leasing critical load, backup electrical supply, development of global web communications, etc.

3) KEY RESOURCES

The Key Resources of Facebook is their Technology Infrastructure which helps them in the further development of its value propositions. The major resources of Facebook are the servers that keep the site running despite the heavy amounts of traffic. These servers are very essential because the services and operations of Facebook depend solely on the website. A down server could result in the loss of millions of page hits. With the help of their web hosting providers and data center operations, Facebook is able to create a more secure and efficient network by co-locating its servers, which is very important in the operations of the business.

4) VALUE PROPOSITION

This includes the activities that allow the organization to execute its strategy and establish a presence in the market. The Value Propositions of Facebook are as follows:

 Connect, Share and Communicate with Friends: It is Facebook’s vision statement to mission is to give people the power to share and make the world more open and connected. They provide an expressive way to communicate with people and businesses alike across a variety of platforms and devices, which makes it easy to reach almost everyone seamlessly and securely.

 Customize And Share Your Photos And Videos: Facebook lets us customize and share photos & videos across all their platforms (Facebook, Instagram, Messenger and WhatsApp).

 Experience Virtual Reality Technology: Another unique proposition of Facebook is to let the users experience Virtual Reality through their software Oculus. It allows people to enter a completely immersive and interactive environment to play games, consume content, and connect with others

 Personalized Social Experiences: Facebook provides their audiences ranging from their closest friends to the public at large, an inimitable personalized social experience that the users cannot obtain anywhere else.

5) COST STRUCTURE

 Cost of revenue. Our cost of revenue consists primarily of expenses associated with the delivery and distribution of our products. These include expenses related to the operation of our data centers, such as facility and server equipment depreciation, salaries, benefits, and share-based compensation for employees on our operations teams, and energy and bandwidth costs. Cost of revenue also includes credit card and other transaction fees related to processing customer transactions, amortization of intangible assets, costs associated with data partner arrangements, and cost of virtual reality platform device inventory sold.

 Research And Development- Research and development expenses consist primarily of share-based compensation, salaries, and benefits for employees on our engineering and technical teams who are responsible for building new products as well as improving existing products. Facebook’s R&D (research and development) expenses were $2.1 billion in 3Q17 compared with $1.5 billion in the year-ago quarter. They also have costs and expenses related to the development