1. MI021/CS021: Computers in Management April 30, 2010 Facebook Case Prof. John Gallaugher www.gallaugher.com written case available at www.gallaugher.com/chapters Copyright ©1997-2010 John M. Gallaugher, Ph.D. All rights reserved Note: not all images cleared for commercial copyright.

2. Issues Covered Background on Facebook –Competitive advantages –Facebook vs. the Competition Key efforts –Feeds –Platform –Beacon –f8 ’10 - The Web’s Plumbing Advertising challenges & opportunities

3. 3 400 million users cash-flow positive avg. time online ~55 mins. 3

4. “We Want In!”

5. Feeds = Ebola for Data Flows

6. Facebook Encroaches All Source: TechCrunch: http://www.techcrunch.com/2008/09/05/googles-picasa-becomes-more-flickr-like-adds-new-ways-to-explore-interesting-public-photos/

7. 10 Facebook Apps

9. Copyright / Scrabulous

11. Beacon

12. Beacon Busted

13. A GLOOMY FORECAST Can social-networking sites continue to make significant inroads into the U.S. online advertising market? The outlook is uncertain. A shaky economy and setbacks in ­targeted-advertising initiatives have caused leading online marketing research firm eMarketer to project more modest revenue growth for social-networking sites over the next four years than it had previously predicted.

14. THE GLOBAL VIEW Social networking is a global phenomenon, and reaching users outside the United States will become increasingly important as advertising dollars flow to Western Europe, Asia, and beyond. Source eMarketer / Technology Review

15. Revenue Per Unique Visitor Source: Business Insider March 18, 2010

16. Content Adjacency

17. 17 Hunt vs. Hike Click-through rates –Google: 2% –Facebook:.04% CPM –TechTarget: as much as $100 and above –Technology Review: $70 –Mashable: $7 - $33 –Facebook (via Lookery): 13¢ –Facebook (targeted ads): 15¢ 17

18. Creepy Ads I Hate!

19. Better Targeting

20. Facebook Knows Where I Am & What I Do

21. Which Ads are Targeted at You?

22. You are Part of the Targeting Organic or Earned Ads : Free ads that come from people promoting products on their own. Organic or Earned Ads : Free ads that come from people promoting products on their own.

23. Value?

24. Engagement Ads

27. Like

28. Facebook Integration

29. Auto Login Catalyzes Signup / Experimentation

30. Partners Ask Permission

31. CNN & Facebook Feed Integration

32. Buy, Opt-in, Post to Feed

33. Viral Invites

34. Viral Giving

35. APIs & the Free Rider Problem

36. Mobile

37. What Happens in Vegas Stays on Facebook (& YouTube, Flickr, Twitter,...) Source: CNet, Wonkette, and CBS Evening News