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Unformatted text preview: FACEBOOK CASE: E-220 DATE: 05/03/06 I wake up and check my e-mail, then I go to Facebook. At night, I do the same thing. Facebook is like an ice cream sundae because you can do anything with it, and no matter what, it's still fun. -Tiffany Chang, 17, student at University of California Davis 1 INTRODUCTION In just over two years, Mark Zuckerberg had built the social directory Facebook from nothing more than an idea into a national phenomenon worthy of a reported $750 million buyout offer. It had become so vital to the university lifestyle that first-years were creating their Facebook profiles long before they even set foot on campus. 2 By the end of2005, college students all over the U.S. were spending countless hours every day on the addictive and rapidly growing website. Nevertheless, other well-funded, so-called "social networking" sites had come and gone long before Zuckerberg coded Facebook in his Harvard University dormitory. Was it just a fad that would disappear from the collegiate landscape as quickly and as vigorously as it had consumed it? Or would Facebook remain popular and overcome mounting competitive threats and intense media scrutiny? The organization had grown from just a few friends programming around a kitchen table to a full-fledged technology business with over 100 employees and 7.5 million users. Zuckerberg would have to develop an organization strategy that could allow the company to keep up with its underlying growth metrics, while ensuring Facebook's user experience was better than its alternatives. The company's core market--college students-were prone to switching and potential new markets--college students outside of the U.S. and high school students-were rife with well-funded entrants that were a step ahead of Facebook. Focusing the organization on the 1 Matt Marshall and Anna Tong, "Palo Alto, Calif.-based Facebook brings social networking online," San Jose Mercury, August 29,2005. 2 Fred Stutzman, "Percent of Freshmen Who Use Facebook.com," eMarketer, January 2006. Mike Harkey prepared this case under the supervision of Professor William P. Barnett, Thomas M. Siebel Professor of Business Leadership, Strategy and Organizations, and Mark Leslie, Lecturer in Management, as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. This case was made possible by the generous support of Mr. James G. Shennan, Jr. Copyright © 2006 by the Board of Trustees of the Leland Stanford Junior University. All rights reserved. To order copies or request permission to reproduce materials, e-mail the Case Writing Office at: [email protected] or write: Case Writing Office, Stanford Graduate School of Business, 518 Memorial Way, Stanford University, Stanford, CA 94305-5015. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means - electronic, mechanical, photocopying, recording, or otherwise - without the permission of the Stanford Graduate School of Business. Facebook E-220...
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