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Facebook Business Model

Assignment 2: Technology - Facebook's Dilemma- Case Study

This assignment focuses on the phenomenon of Facebook and its business model. You will need to examine how the privacy issues of the users interplay for and against its growth.

Use the material in the textbook, assigned articles and other sources to address the following questions:

1. Is the business model Facebook is using viable? Which type would you categorize it as being? Explain.
2. How do the privacy policies of Facebook interplay with its growth?
3. What anecdotal experiences can you share about Facebook that aligns with the issues brought up in this case study? If you haven't any, find friends who use Facebook and have them offer their thoughts on it.
4. Where does the social aspect of an e-commerce enterprise fit in the priority of an e-commerce business model. How well and effectively does Facebook's social aspect fit in their e-commerce business model?
5. What would you do to improve Facebook as an e-commerce enterprise?
Be sure to cite the references you used.

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Assignment 2: Technology - Facebook's Dilemma - Case Study

This assignment focuses on the phenomenon of Facebook and its business model. You will need to examine how the privacy issues of the users interplay for and against its growth.

Use the material in the textbook, assigned articles and other sources to address the following questions:

1. Is the business model Facebook is using viable? Which type would you categorize it as being? Explain.
The business model that Facebook is using is viable. It does not charge its users any money but generates its revenues from advertising. The website has a Flyers application program. In addition, there is the Facebook Credits program that is the source of revenue to the company. This is a virtual currency that users can use to buy virtual goods like application and in games. 30% of the revenues of Credits are retained by Facebook. In addition, Facebook earns revenue from its Flyers program. This is the application through which Facebook gets advertising revenues. However, the advertising click through rate in case of Facebook is low.
If we use the chickens and pigs framework, the model sued by Facebook is the Chicken Model. This is a model where the transaction frequency is recurring and the revenue contribution from each customer is relatively small. Facebook offers problem management in the sense that it enables its users to remain in touch with friends. Consistent service will enable Facebook to improve its revenue performance (1).
The business model of Facebook is one in which the firm operates a social networking website where users can add people as friends and send them messages and update their personal profiles and notify their friends about themselves. It also allows users to join networks organized by workplaces, schools, and colleges. This model has been so successful that presently it has 500 million active users. This gives it tremendous opportunity to raise revenue through advertising and through "credits" sold for games, ...

Solution Summary

Facebook business model is discussed very comprehensively in this explanation..

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