FACEBOOK.

COM
Summary of Case
Mark Zuckerberg, a 21 year-old Harvard University dropout, started
Facebook.com in 2004. Traffic on the site has increased by over 270% in the
last year. Within two weeks of building the initial Facebook site, two-thirds of
Harvard students had uploaded a picture and added some information about
themselves. Zuckerberg and his buddies expanded Facebook to include more
schools and students, attracting profiles from roughly 150,000 students from 30
schools. Shortly thereafter, Zuckerberg moved to California and formed the
company that exists today. Facebook satisfied an unmet desire on the part of
students to connect with and stay connected to other students in an electronic,
easy-to-use, and fun format, but parents and school administrators are advising
participants to be very careful about the type of information they post. School
administrators have used information and pictures students post on Facebook to
expel and suspend students, and employers are now looking there for
information about applicants. Furthermore, information on Facebook is available
for viewing by sexual predators. Mark Zuckerberg’s ability to keep the Facebook
phenomenon going is tied to his ability to plan for the company’s long-term
future, given privacy concerns and the pluses and minuses of increasing
advertising on the website.

Suggested Answers for Discussion Questions

1. What is the decision facing Facebook.com?

 Facebook must figure out how to expose Facebook members to advertisers without alienating
posters. Determining the degree of exposure to ads that Facebook members will tolerate will be a
difficult balancing act.

A more comprehensive decision would be:

 Facebook needs to plan for the long-term future of the company given privacy concerns,
increased usage by authority figures to enforce school policies, and the need to increase
advertising to make money on.
2. What factors are important in understanding this decision
situation?
The following factors are important in understand this decision situation:

1. Facebook became a huge success in a brief time because it satisfied an unmet desire of students
to stay connected to other students in a cool way.
2. There are a growing number of social networking sites on the Internet providing an opportunity for
socialite to interact with others similar to them.
3. School administrators have used information and pictures on Facebook to expel and suspend
students from school.
4. There is potential for a negative effect from increased commercialization of the site.
5. Many companies now routinely check out a job applicant’s Facebook posting, looking for
unacceptable material there.
6. The current practice of allowing Facebook members to engage in enriched interactive experience
by sharing their experience with a community of friends may not be appropriate in the future.
7. Facebook needs to maintain a “cool” site and for the target audience to visit often.

3 . What are the alternatives?

Students might recommend a variety of different marketing strategies. Some possibilities are:

1. Make no changes and see if the market will continue to provide support.
2. Increase security to prevent unwanted viewing of posted information.
3. Evaluate the increase in guarded behaviors occurring with vast amounts of information about
themselves and friends.
4. Conduct research to determine if the long-term potential of Facebook will be undermined by
commercialization.
5. Determine if increased security on the site could be an acceptable way to minimize viewing by
employers or sexual predators.

Suggested Answers for Discussion Questions

1. What is the decision facing your case ?
2. What factors are important in understanding this decision
situation?
3. What are the alternatives?
4. Which one is the best alternative ?