Tag Archives: Business and Finance

Is Facebook Viable?

There’s been a lot written since Facebook did their IPO a while back questioning their business model.

Image representing Facebook as depicted in Cru...

Image via CrunchBase

Some analysts say that once the company solves monetization of the mobile traffic all will be well. Others speculate that a better, more marketer-friendly platform is needed. Personally, I like to let the companies themselves identify where the problems may lie. Facebook did exactly that in their S-1 filing a year ago as they prepared to go public:

If we fail to retain existing users or add new users, or if our users decrease their level of engagement with Facebook, our revenue, financial results, and business may be significantly harmed.

Fair enough.   After all, without users continuing to add content, what’s there?  Which is why a couple of things I’ve read lately have me wondering if Facebook is a viable business in the long-term.  I know – it’s huge, it takes in a lot of money, and it seems sort of ubiquitous.  At one time, many of those things were said about MySpace or the walled-garden version of AOL, so bear with me.

A decent amount (low double digits at one point) of Facebook’s revenue came from Zynga‘s games.  Is anyone you know still “Villing”?  That goes to the engagement point.  More important than that (since revenue sources are fungible), is the fact that younger people don’t seem to be using the service.  In fact, the real young crowd – those reaching the age when they would normally join Facebook – seem to be focused on other services.  Instagram and Tumblr, by many accounts, are more popular with the young teen set than Facebook is, and that’s been the case for a year.

A Pew study came out the other day that should set off te fire alarms at Facebook HQ.  What it found was:

  • 61% of current Facebook users say that at one time or another in the past they have voluntarily taken a break from using Facebook for a period of several weeks or more.
  • 20% of the online adults who do not currently use Facebook say they once used the site but no longer do so.
  • 8% of online adults who do not currently use Facebook are interested in becoming Facebook users in the future.

They asked the 61% of Facebook users who have taken a break from using the site why they did so, and they mentioned a variety of reasons. The largest group (21%) said that their “Facebook vacation” was a result of being too busy with other demands or not having time to spend on the site. Others pointed toward a general lack of interest in the site itself (10% mentioned this in one way or another), an absence of compelling content (10%), excessive gossip or “drama” from their friends (9%), or concerns that they were spending too much time on the site and needed to take a break (8%).  Many of those reasons are NOT things Facebook can fix since they’re a result of what users are doing and not the platform.  That’s troubling.

So I’ll put it out there:  is Facebook a viable business in the long-term?  If it’s just old folks like me catching up with high school pals we haven’t seen in 40 years or our grandkids, is it going to be long before all we see are supplemental Medicaid insurance ads and sponsored posts for hearing aids?  What do you think?  Have you taken a break from Facebook?  Have your kids?  Is Facebook viable in the long-term?

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Filed under digital media, Thinking Aloud

The Road To Hell Is Paved With Diamonds

I was out with someone last evening whom I’m hoping will become a client. He’s got an intriguing product and with some help I think it could become a game-changer. In the course of getting to know one another a bit better in preparation for a team meeting today, he said something that resonated:

A rose-cut synthetic diamond created by Apollo...

(Photo credit: Wikipedia)

The road to hell is paved with diamonds.

Now, like me, you might have thought it was paved with good intentions but it turns out that the more I thought about what he’d said, the more I agreed.  What he meant was that too many of us look at the shiny stuff that’s in front of us and lose track of what’s really important.  As with the “good intentions” paving job, we often start down a path thinking we’re doing what’s best for ourselves and our families but end up in a different place altogether.  Working for a jerk or in a job that you can’t stand may bring the diamonds, but think of what’s lost in the process.  Bringing in a financial partner who can provide investment but doesn’t share your vision or ethics can be poisonous. Hiring brilliant people for your team who can’t or won’t get along is terminal.

Don’t misunderstand.  I’m not saying that we as business people and capitalists don’t need to focus on making money.  That’s sort of the nature of any successful business over time.  The business doesn’t survive for very long if it neither makes money nor lays out a way to do so.  What I think my dinner companion meant was that we can’t let the shiny objects – the glitter of the diamonds – become a distraction from what we meant to do with our business or our careers in the first place.  The connections we have with people – managers, subordinates, clients, partners, customers – should be based on more than just a financial relationship if they’re going to endure the odd bumps in the interpersonal road that come along.

What do you think?

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Filed under Growing up, Helpful Hints

Posts of the Year – 5

Polbo á feira with bread and wine

Image via Wikipedia

It’s Friday, so it’s Foodie Fun time.  Since we’re doing the most read posts this week, here is the most read food post along with the business point it inspired.  It was called “Pulpo a la Plancha” after the dish that inspired it.  Enjoy, and have a great New Year!

To end the week, it’s pulpo. For those of you who don’t speak Spanish, that’s octopus. I have had pulpo on my mind since dinner last night and since it’s Foodie Friday I thought I’d share some of what I’ve been thinking about.
The Mrs. and I went to a tapas place last evening and there was a special of pulpo a la plancha. I’ll explain what it is in a second but I ended up ordering two plates of it and eating them both by myself. Gluttony? No, just a great business lesson. Continue reading

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