Company Case Facebook: Making the World More Open and Connected “The world has rapldy gone online, socal, and mole. And no ccompary 1s more online, socla. and mobile than Facobook In ‘spite of the growing number of social macla options, Facebook ‘continucs to dominata. Inte more than a decade, it has accu- ‘muiatod moro than 1.6 billon active monthy usore—moro than 20 percent of the worl's total population—and some 1.5 bE {lon peapla now access the network on a mobile device. More than a billon Facebook members aready log on dally, and five ‘naw Facebook profes are created every sacond. In the United ‘States, more collecth time Is spent on Facebook than on ary ‘other wabstta. Together, the Facebook commurity upioads 350 millon photos, “Les” 4.5 bllon tems, and shares 4,75 ballon ‘ploces of content daly. ‘Having achieved such phenomenal Impact In such a short ppatiod of time, Facebook's success can be attributed 10 tona- ‘lous focus on tts mission—“to give people tha power io share ‘and make the world more open and connected” I's a place whore fronds and family moot, share thelr stores. dlsplay thalr ‘photos, pass along information, and chronico thal Ines. Hordes ‘of poopie have mado Facebook thal gta home 24/7. From Simple Things Inttaly, canying out tis mission was relatvaly simp, Whan CEO Mark Zuckerberg and frends launched “thefacebook com” in 2004, twas for Havard students ony. Sil with ts lan dosion {PNo Disneyland, no ‘Le nude gis." the fledging ste atracted abt of aonion when tracked up more than 1,200 registred {uses by the end othe fist day. Within the frst month more than | half of Harvard's undergracuate student body had fpinad. The ‘massive resporse demonstrated tremendous untapped demand. A fist, the socal network grew one university campus at atime. But wasn't long before Facebook was open tothe pubic and ‘aople verywhore wore registering by the millons. ‘As Tt raw, Facobook’s forfaco was a work In progress. Features wore axed and modi in order o appeal to eveyone. The network's growth and devdopment aso gave tthe ablty 10 target spectic Kinds of content 1 wol-dofhed usor sogments. Howover Faccbook’s “al hings to al poopie’ approach lft mary ‘users, espoctaly youngor ones. visting Facebook less and shif- Ing tno to more spoctazed competing soca networks. To moct that growing threat, Facebook shited gears rom a “one st for a" approach to a mult-app strategy of proving “something for ‘any anc every Indvual” According o Zuckerberg, “Our vision for Faccbook's to create a sot of products that halp you share ary ‘Kid of contantyou want with any audience you want.” ‘As the fst move under lis mutappstratogy. Facebook pald ‘athen stunning $1 bllon to acqule nstagram, the surging photo- ‘harng app. Atthough Facebook aeady had iis own photo- ‘hang features. the Instagram acquistion brought a younger 27-rillon-srong user base ino the Facebook fold. And rathor than incorporating Instagram as lust another Faccbook feature, Facebook maliaed Insiagram as an Independent brand with lis own personally and user base. Instagram and) Facobook ‘customers can choose thar dested lovato ntagraton, nung Instagram membership without a Facebook account. “The fact that Instagram fs connected to other senfess beyond Facebook Is ‘an imporant part ofthe experience” says Zuckerberg. Not eng aftr the Instagram acquistion, In ts quest to acd unique new products and user segments, Facebook announced | the creation of Creative Labs. a Facebook division charged with developing singl-purpose mobile apps. It also urwaled the now dlson's frst product—Paper, a mobo app that provides easy ‘and personalved aocass 1o Facebook's Naws Feed. Alnough the ‘core Facebook mobile app akeady previgod access 10 this con- tnt, Papor let users organiza the fead by themes, intorests, and ‘SourbeS, soning Ital up In a ful-scxoon, dsractlon reo layout. ‘On the beds of Paper came another stunning Facebook ‘moga-acquiston. Dwarfing is Instagram doa), Facabook pald a shocking $19 billon for standalone massaging app. WhatsApp. Facebook's own Messenger had aeady grown quickly to 200 millon users. But simlar to Instagram, WhatsApp immedataly ‘gave Facebook something It could not easly buld on its own— an Independent brand with more than 450 millon regisorod Intemational users, mary of whom were nat on Facebook. By developing and acquiing such now products and apps, FFaoabook Is doing what It doos best growing is mmborship and giving Is dverso users more ways and reasons to connect, ‘and engage. Facebook's fuller portiolo lets usors meet thelr ind \ual necds within the broadening Facebook famly. Tothe Stratosphere ‘As Facebook develops more reasons for more users fo connect ‘and engage, I also pursues technologies that might leave soma ‘observers scratching thar Reads. For ecample, a fow years 290, tho soclal modla giant pald $2 billon to acquire Oculus WA, tho Virtual rally start-up. In the past year, Facebook has also do- \Voloped is own 360-dgree starsescople 3 video camera with 17 lanses—a davice It cals Facebook Surround260. Wry these _acquisttons and developments? According to Zuckerberg, thas 10 do with “st stops” When Zuckorbag took is fist stops, his parents noted tho ‘vent in his baby book. When one of his cousins fst walked some time lator, Mom and Dad captured the moment with a photo. ‘When hs nleca laamod to walk, the video camara was rollng. But for his own daughter, Zuckerborg wantod 10 take It 10 the next lavel. When Max. tks har fist stop, wal be able to capture tho Whole scone, not just wrlta down the date or take @ photo or tako a litle 2D video,” Zuckerber says. “The people we want to share this wih...can go there, They can experencs that moment” Zuckerbarg's wanting to broadcast his daughtor’s frst stops as though others were there Is Just ona more axample of how Facebook constanty focuses on is Central mission—to connect, ‘he world. “Overtime, people gat cher and richer tools to com ‘municato and express what they care about” says Zuckerberg Facebook antichates that this kind of video could lead to an cently naw mode of communication, one that could axtond t0 Faoabook's awn Oculus virtual realty headsat “Asmuch as 3D vinual realy video sounds Ike along shot. I's ‘easy pickings compared to Facebook's biggest current intiatve. Zuckerberg has boon spanning the globe, addressing everyone from global leaders to follow entreprenaurs and making a caso for what ha sees as the most citical social endeavor of our time—making the Intemet a basle human right, Ike health cazo or clean water. As ha tos it, lack of ftea and open access t0 Information Is the greatest barir to prospetty for the work's im ppoverished. Yet almost 5 billon people are not yet connacted to the Intemet. Zuckerborg and the Facebook team aim to oinato that baer by making the intorat accessible to all. ‘To this end, Facebook has cteatod lis own Innovation think tank called the Connectivity Lab. This group wil havo a sataltaorbiting above eub-Scharan Africa withina year. But satalites are expensive, so the group is also working on other options. The most promising opticn i known intemally as Aquia—a sleek, boomerang-shaped drone that has the wingspan of Boeing 787, weighs less than 1,000 pounds, and oan to stay alft at £65,000 feet for months et a ime. Soon to be tested, Aquila wil receive radio signals from a ground station, relay those signals Via lasers to transponders on the ground, and corvert the signals to WEF or AG netwoiks. Facebook’s vision is to eventully have 10,000 Acuilas fying the tiendly skies around planet earth. Giving tt ll Away Afough Facebook spent more than fve years bulding is user haze and paying almost a0 attention to generating inceme. i row making Up fer lst tie. Inthe past five years, Facebook's revenues have gone viel—from $2 biionto $18 tlio, ninefold increase t ts tp tne. With ¢ 20 percent margin, ts bottom line igrt cing too badly either. And athough Facebook has excert mented wih verious ways to generale income, the vast majority of fs income comes va teckanct-rue online advertising With athe development offancy technologies uch a dronce, lasers, virtual ely, and SD video, you rightthirk that Facebook intends to diversify into new businesses that could generate cash {nd pros. Eut nothing could be further from the uth. fn fact, 22 Facebook launches theee and other technologie, ite ving ‘nay fe designs for fe. Yeas ago when Facebook bit ts own -severs and data centers, it promptly open-sourced the designs land ft the werd have them for nothing. lt the same with Bi dia enabytice tocle eich ae Carearda and Hadoop. Athough thet right seem Ike throwing away money, is ight in ne with Facebook's mission, Whereas most companies. define ther ‘eves by a ciaft, such as making the best consumer eectoni gadgete or coking compariee’ efciancy probleme, Facebook has been built round a sngle-minded goal of connecting every one inthe werd and giving them the took they need “to share anything end everthing a raul way” For thet reason, Faceback focuses on what it does best— beng the best social network. Rather than becoming dtected by developing multiple business units and trying to make money though dverlied rears, K renahs focused on bul tcer bace and treating It core eocil meta precicte ae works in process. To those who view the projects coming out ofthe Connectivity Lab as unrelated, Zuckerberg points out, "They're actualy Inctedby focused In terms ofthe mision. The teal Goa is tal the consmamity Alt of times, re best way to advance the technelogy iso workon tas a community” With many compsnies already working on the vey tech- nologies thal Facebook f tying to eckercs kt might seer that Facebook iant adding mich Put Zuckerberg is imontnt, and he fet thatthe tech word s providing too litle, to late. Far x arp, Facebook's lser drones willbe able to shower entre rural CHAPTER 2 | Company and Marketing Strategy 8Y ercas, vilages, end cites with extremely high bandwidth at higher speeds with mere economical cosis than the systems current being employed and developed by telecom compenies. "We need certain technclogies to exist in the world, so we wil build thoan” caye Zuckerberg. “We're net ealing [server] or camo or connectivity services. But if ro one ese i building ther, we're going to” ‘Whatever its tutu, Facebock seems to have barely scratched the curface when it comes to fulling te micsion. Its now mut-app, mult-segment strategy, combined with its massive, closely brit social stucture, gives Facebook staggering potenti. And moving the world tovard internet access for all wil help make Facebook's portfsio of appe and products avaiable to everyone. For years, a popular saying around Facebook has been "We are one percent ddonewith our mission.” These days, those who manage Facebook. might concede that they've made progress—say, to meybe 2 pe ‘cant, For ckaptice, consider haw Facebook got started: Iwas a faw rights ater uckarber} launched the wobsta. He ard his computer sclencs buddy wars gating pleza and talking. “Zuckarbarg tld his end that someone was gong t bul 2 so- Cll network, bocause It was to Important not to adet But he cdh'tquess, tack then, that he'd b the guy todo I. Thare ware ‘older people and tigger companies. So why, then, was Zucker- berg the cne to bull Facebock? “I hin i's because ws cared Alot cf tines, carla about something and balling nk runes he says." couldn't connec: the dots going ‘onward on Facebook ‘for the bogining Toms, that's a ot ofthe stay offFacebeok’s futur) to Questions for Discussion 248 Is Facebook's mission statement market oriented? Explain. 2419. How isFacebook’s stategy diven by ts mission? 2-20 Is wise for Facebook to give away it technologies for free? Why or why not? 2:21 Ae it moves forward in fulling te mission, what chal lenges does Facebook face in the future? ‘Sources: Basod on Inforaten fern Cade Moz, "Haw Wil Zuckertong ule the Woid? By Gig Facebook Tach Away" Wred, Acrl 12, 2016. ww.vireclsom2016 Omak cuckerbere-Gng aay f0ebooKS” {ach Foo! Jossl Home, "nséo Faodbook's Aritous Plan to Connact the Whole Word’ Wed, Jaruay 19, 2018, wunuwred.com/201601/ facotook-zucterbag rt. Sarah Kes, "With Faper, Facebook ‘tops Thing f© fo Eventing for Eveyoney' Fast Company, January 80, 2014, wanutastcompany.con025762/wit- paper iacabockstops- tying 1o-bo-evaytiingfor evening Josh Cansthe, TuckSays Ad Aren't ‘he Viay © Nonatzs Messaging! Techrunch, February 19, 2014, www ‘cherunch com/2014/02/1O/vhatanp-vil-nonatizelata; and Infoma- ten Yom winfecebaok canaceboaldrfo’Rsb=page info and WWW epteriacontep- 15 valuable acabook-satscy,aroassed June 2016