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    Facebook: Challenges, Recommendations, IPO market value

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    1. Discuss the challenges at Facebook.

    2. What recommendations would you make to Facebook to ensure the industry leadership position is sustained?

    3. What drives the market for IPO?

    Please reference any material used.

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    Solution Preview

    See attached article.

    I am sure you can think of several challenges facing Facebook when you consider its' predecessors: Friendster, Bebo, MySpace, US Postal Service, Telegram/graph. Times change and so must the delivery of news/social info/and now social networking.

    Initial challenges that come to my mind:

    -average age of managerial team. This is a positive and negative. Without the maturity and business sense the team lacks crucial awareness of the bigger marketplace. However, this also enables the team to think bigger and not be restricted by status quo.

    -cries of Monopoly: recently Facebook has become accused of being all encompassing. Have attached article from WSJ but here is the link http://online.wsj.com/article/SB10001424052748704635704575604993311538482.html?KEYWORDS=facebook+monopoly#

    - ideas continue to evolve, innovation continues: Facebook just introduced a message system to draw in IM, email, twitter, etc. Will this be a revolutionary idea? It is hard to imagine that people will want to entrust all of their info to one provider- note this ...

    Solution Summary

    This solution outlines the challenges facing Facebook, and gives recommendations on how to deal with them. It also analyzes how to put a market value on the stock. It is data rich, with lots of useful links.