Welcome back to “Company in Focus” – a weekly series where I discuss some of the world’s largest companies, including Google, Facebook, Amazon, Twitter and many more of the business world’s behemoths. Each company will be profiled in three sections across three articles. In the last article, we focused on looking at how Facebook (FB) started, the business ideas they implemented, and the problems it faced during its infancy. This week, we will be detailing Facebook’s success strategies whilst focusing on their key acquisitions, such as Instagram and WhatsApp.
As of March 2021, Facebook is the only social platform to reach more than half of all social media users (59%). Furthermore, Facebook has amassed 2.8 billion monthly active users (+12% from September 2019), and 95% of the US population over age 12 are aware of the platform. Whilst these statistics are undoubtedly impressive, what have been the key success strategies and factors that have aided them in their rise to the top of the social media world?
Ease of Use:
Facebook has taken a calculated approach to ensure ease of use for all of its users. While younger users embrace new features and platform development, some of the older users often struggle to adapt. As a result, Facebook aims to make its platform easy to use for users of all ages and backgrounds. For example, on Facebook, you can tag someone in a post by simply beginning to type their name. On Twitter, this is only possible by using the ‘@’ button – a symbol with which the older generation may not be as familiar. Multiple minor differences such as the example above combine to ensure Facebook remains one of the more accessible social platforms to use in 2021, helping them retain 2.8 billion monthly active users.
Whilst it is well documented that YouTube was at the forefront of the online video revolution, Facebook’s growth in the online video space has been exponential in recent years. According to 99Firms, 500 million viewers watch 100 million hours of video content on Facebook daily, resulting in 4 billion daily video views. These incredible figures surpass those of YouTube, making Facebook a marketing haven for businesses, influencers and content creators.
The introduction of Facebook Live in August 2015 saw Facebook tap into the live-streaming industry. Facebook Live videos produce six times as many interactions as traditional videos and receive ten times as many comments. Furthermore, 42.7% of businesses broadcasted a live video in 2018. Facebook Live appears to be a popular tool amongst businesses due to the increased interaction it allows with potential customers.
Strategic and well-planned acquisitions have been a significant factor in Facebook’s success story. Facebook made its first acquisition in 2007, buying Parakey for an undisclosed sum. The founders of Parakey, Blake Ross and Joe Hewitt (known for creating the Firefox web browser) joined Facebook to aid in developing its platform and website.
In November 2010, Facebook acquired the FB.com domain for $8.5m to provide its employees with FB.com email addresses.
Facebook’s acquisition of Instagram in 2012 was its largest purchase at the time ($1bn) and arguably remains the most famous. Whilst Instagram still operates under its brand, many features, such as photo sharing, have been integrated with Facebook.
While the Instagram and domain acquisitions are significant, Facebook’s acquisition of WhatsApp in 2014 remains its most significant acquisition to date. The deal eventually cost an eyewatering $22bn, leaving many investors to question if Facebook had overpaid for a free service. However, the acquisition of WhatsApp has allowed Facebook to gain access to a large, overseas base which can be key in battling competition from Twitter.
The acquisitions of WhatsApp and Instagram, the introduction of video content and Facebook’s ease of use have been pivotal in Facebook’s success story and continue to play an important role in the company’s operations. In 2021, Facebook remains the leading social platform, reaching 59% of social media users. As articulated by Oberlo.com, “Since its creation, Facebook has ruled the world of social media, and it seems like there’s no stopping the giant. Though there are many strong competitors like Instagram, Snapchat, Twitter, and several others that are trying to compete, Facebook still stands strong among the competition.”
Tune back into The Corporate Feed next week, as I discuss the future of Facebook and how the company can utilise advancements in Artificial Intelligence (AI) to maintain its status as the largest social platform in the world. We will take a closer look at the statistical predictions for the company before highlighting the obstacles that may appear in the years to come.