MIS Chapter 12
Facebook was valued at over ________ in 2012
$100 billion
2020 revenues were nearly _______ and profits topped ______
$86 billion ; $29 billion
Smartphone app dynamics:
- access a user's address book to rebuild social graph for new mobile service - easily share photos and videos - use push notifications to encourage use of app - app icons on home screen as visual reminder to use app
Facebook's Open Graph
- allows developers to link Web pages and app usage into social graph - offers website operators the choice to accept a user's credentials for logging in - allows firms to make their sites more personalized by leveraging data
Facebook Graph Search
- allows users to draw meaning from the site's social graph and find answers from social connections - could become a primary source for job placement, travel info, and even dating
Getting people into new groups helps the firms geniuses:
- broadly share their knowledge - generate idea flow - prevents managers from developing fiefdoms
firms face two key challenges when advertising on social media:
- content adjacency - user attention
Challenges faced when opening platform to third parties:
- copyright violations - apps that annoy, purvey porn, step over boundaries of good taste - privacy and security concerns
3 reasons why many are offline:
- data is too expensive - services aren't designed for emerging market use - content is not compelling enough to draw in non-users
MySQL
a popular open source database
Desktop's larger screens allow for:
additional menu items and options
The bulk of Facebook's revenue comes from:
advertising
Zuckerberg claims messaging is:
one of the few things that people actually do more than social networking
Developers are allowed to charge for
products and offer them for free or run ads
APIs
programming hooks, or guidelines, published by firms that tell other programs how to get a service to perform a task such as send or receive data
The willingness to take bold risks on new initiatives has allowed the firm to
push forward with innovations that many users initially resisted but eventually embraced (news feed and messenger app)
Open approach has cause strategic asset weakening and problems with
revenue sharing and security
In order to keep the ideas humming, Facebook regularly ____________
rotates technical staff
Programmers can write applications that
run inside a user's profile
Attention Challenges: the Hunt vs The Hike
the user attention problem and the difference between Google (search) and Facebook (social)
"ThisIsYourDigitalLife" Data
- 270,000 people authorized the app to collect data, but all were told the focus was academic research and no commercial ties were disclosed - allowed app developers to access information and friend network
Mobile Platforms
- A/B testing is much more difficult with mobile - updates are slower - fixes for app development mistakes are more difficult - facebook suffered to bring its platform to mobile, but several global messaging apps are directly accessing user address books and building their own app platforms
Facebook Messenger includes key features:
- Encryption - Group messaging and conversation threads - stickers - location sharing - notification if message has been viewed - recording and sending audio messages
- Facebook acquired instagram for $1 billion - turned potential rival into an asset for growth and another vehicle for the firm - since acquisition, Instagram has continued to operate as a separate brand, tripling its user base
Oculus Virtual Reality (VR)
- Facebook's $2B purchase of VR is a long term bet at keeping the firm evolving - a computing screen you strap to your face
Global Messaging App Platforms
- KaKao Talk - Line - WeChat
open source software (OSS)
- What powers the site - Service runs on the Linux operating system and Apache Web server software
Advertising and Social Network
- a challenging landscape but a big payoff - if facebook is going to continue to grow and give away its services for free, it needs to make money somehow
"Friending"
- a link between nodes in the social graph - requires both users to approve the relationship which creates trust
Open Graph increases value by:
- enhancing network effects - strengthening switching costs - creating larger sets of highly personalized data to leverage
Sheryl Sandberg
- facebook COO - depicted as person who runs the place - named Fortune magazine's "Most powerful women in Business" - came from Google - Has a book called "Lean In"
Challenges Facebook faces:
- generating more revenue from customer base - growing advertising - monetizing mobile and transitioning to a mobile-centric world where competitive conditions differ - protecting user privacy - competing with new competitors
Exploiters have different motivations:
- get people fired up to spread content - anyone who clicks through to view fake news sites is lining the exploiters pockets
Sheryl Sandberg helped Facebook:
- increase user ten-fold - devise an advertising platform that's attracted the world's largest brands - have a sales organization that serves a customer base from the Fortune 100 to mom-and-pop stores
- mobile messaging - emerged as global leader in mobile messaging - usage numbers were 12 to 64 times ahead of Facebook for messaging - Facebook bought WhatsApp for $19 billion - $16B in cash, $3B in stock
Facebook Messenger
- platform allows firms to build AI powered chatbots that interact with customers - payments platform that allows users to send and receive money with their contacts
By examining Facebook's mistakes, managers can:
- raise their internal awareness of pitfalls associated with adding technology initiatives - gain insight into effective course correction if initial efforts run into trouble
What did Facebook do to try and fix the data breach scandal?
- shut down app access to friend data - shut down 200 apps - begun auditing "thousands" of apps - notified users who have had their data compromised - introduced a host of new tools
Hacker Way
- the concrete letters in the firm's central courtyard spell the work HACK - used by software engineers to refer to a clever solution
Beacon
- user reaction was swift and brutal - commercial activity of Facebook users began showing up without their consent
Cambridge Analytica
- whistleblower at UK-based research firm detailed a surreptitious campaign to harvest user data on a wide scale - develop psychographic profiles - sell services that will "find your voters and move them to actions
Every ________ employees are required to leave their teams and work on something different for at least _________
18 months ; a month
Facebook's performance has silenced skeptics
2020 revenue grew nearly 22% and profits were up nearly 60%
Mobile brings in more than ______ of the firms ad revenue
90%
content adjacency
Concern that an advertisement will run near offensive material, embarrassing an advertiser and/or degrading their products or brands.
The road around Facebook's campus is named:
Hacker Way
Deep Web
Internet content that can't be indexed by Google and other search engines.
venture capitalists (VC)
Investor groups that provide funding in exchange for a stake in the firm and a degree of managerial control
A good portion of Facebook is written in:
PHP (a scripting language particularly well suited for website development)
switching costs
The expense a customer or company incurs in lost time and expenditure of resources when changing from one supplier or system to a competing supplier or system.
social graph
The global mapping of users and organizations and how they are connected.
Facebook cloud
big group of connected servers that power the site and scattered across multiple facilities
colossal walled garden
closed network or single set of services controlled by one dominant firm (stifles innovation, exchange, and competition)
The earlier a firm accepts VC money, the more ___________
control investors can exert
A lot of information on Facebook is private and referred to as the __________
deep web
Platform owners beware:
developers can help you grow quickly and can deliver gobs of value, but misbehaving partners can create financial loss, damage the brand, and sow mistrust
Many of the ads you see on Facebook and related properties are for
discovery or awareness building rather than a stated intent to purchase
Hackathons
firms run all-night sessions where no one is allowed to work on what they normally do
Mark Zuckerberg
founder of Facebook
Worries over Facebook Ad's
growth slowed in the two quarters prior to the firm's IPO and many questioned the firms ability to monetize mobile, temporarily driving the stock below issue price
election tampering
highly sophisticated campaign undertaken by agents acting on behalf of the Russian government - as many as 150M americans may have been exposed over Facebook and Instagram in time leading up to the 2016 presidential election
Zuckerberg has declared Internet access to be a
human right
Users go to Google to _____ and they go to Facebook as if they were going _______
hunt ; on a hike
Facebook Feed
lifeline of Facebook's ability to strengthen and deliver user value from the social graph by categorizing sharing
Authentification
many firms now offer "sign on with mobile" as an alternative to using passwords
Facebook's "no-beta" culture tolerates
mistakes on the road to progress
Firms from Facebook to Apple (through iTunes Store) have struggles to find the right mix of:
monitoring, protection, and approval while avoiding cries of censorship and draconian control
Free rider problem
taking advantage of a user or service without providing any sort of reciprocal benefit
In mid-2020, thousands of small advertisers and over 100 big brands boycotted Facebook after:
the firm avoided addressing hate speech, conspiracy theories, and misinformation
Facebook's Mission
to make the world more open and connected
Technology has no built-in mortality and tools to connect can become
tools for abuse
Beacon's failure is a cautionary tale of
what can go wrong if users fail to broadly consider the impact and implications of an information system on all those it can touch
network effects
when the value of a product or service increases as its number of users expands