For the partner network, Facebook should look for the cooperation with more business organizations that also valuable to users’ life. According to focus group, we know that people also frequently visit sites e.g. Amazon books, online shopping ebay, job page monster. Therefore, e-commerce platform could be built up. Think about if you can buy book via Facebook without logging into Amazon, and probably get a cheaper price, it will not only bring the revenue for Facebook, but also make young people life easier.
Market considerations. Tencent’s strategy is integ rating all exist business models of competitors in the market. It tries to weaken every threat and competition emerging. Facebook also needs to pay attention closely to the global competitors. Company has to figure out strategies for facing emerging rivals. Integrating business model like Tencent could be a good solution.
Financial aspects. 90% of Facebook’s revenue derives from online advertising, whereas less than 10% of Tencent’s revenue comes from advertising. The truth is that people usually dislike ads when they are browsing the web pages or using internet services. Meanwhile, traditional advertising is losing its credibility and impact. People are gaining information from alternative sources, and preliminary evidence suggests that they are getting an increasing
amount of information used to evaluate product and service offering by consulting other people through online reviews and social websites interaction (Clemons, 2009). We suggest Facebook should expand revenue streams besides ads, one way is to obtain revenue directly from large user base.
First of all, Facebook can increase the virtual item sales. Although the company has leveraged Facebook Credits on users, the income on virtual currency takes minor part, and it has not discovered the full potential yet. Look at Tencent, also owns a large user base, it turns virtuality into a successful revenue stream. Each Tencent service can be related to a kind of diamond membership of certain color. With the membership, you can enjoy free and exclusive virtual items. They can be used in profile avatar, customizable page decorations, games, music, or others. 90% revenues originating from virtuality services in Tencent indicates there is a huge profit potential inside. However, Facebook Credits have not yet go deep into the services and are mainly for purchasing virtual goods in web mini-games, therefore more virtuality services should be promoted and developed. And Facbook could try to leverage paid membership mechanisms for exclusive features.
For Facebook, the virtuality services could be personal avatar, page decorations for self- expression. Similar to Tencent, a user can pay to buy virtual expressions, clothes and accessories for the avatar, or a fancy looking music player on his/her homepage. Increase the virtual gifts types, for instance, when people receive different types of flowers with written various blessing words, they would feel really pleasant. Further, Facebook can develop an
- Fall '16
- The Bible, ........., Social network service