Tag Archives: Social Internet

Facebook Goes Public – Nine Things You Should Know About Facebook’s IPO

Facebook could be worth nearly $140 billion by today’s market close

The social network priced its shares at $38 apiece, valuing the company at $104 billion. The average first-day “pop” for a technology company is 32 percent; if Facebook follows that trend, it’ll be worth $137 billion by day’s end. But there’s little about Facebook that’s average, including its public offering. This is the technology’s biggest initial public offering and history’s second-biggest IPO, period, and it will raise about $16 billion. Statistics suggests that the first-day pop—if there is one—will be more modest than average.

A lot of the smart money is getting out

Early investors such as the venture capital firm Accel Partners are selling an unusually high number of shares.Nearly 60 percent of the stock sold today comes from insiders, compared to 37 percent for Google (GOOG) when it went public in 2004. Goldman Sachs (GS) is selling about half its stake, far more than the firm initially planned. “If you really thought that 12 months later the stock would be 50 percent higher, you wouldn’t leave that on the table,” Erik Gordon, a professor at the Ross School of Business at the University of Michigan, told Bloomberg News.

To justify its valuation, Facebook will need to annoy its users …

Thanks in large part to General Motors’s (GM)decision to de-friend Facebook, there are a lot of questions about the efficacy and future of Facebook’s ad-dominant revenue model. And it has high expectations to live up to: The $38 price gives Facebook a whopping 107 price-to-earnings ratio. (For comparison, Apple’s (AAPL) is around 13.) To dramatically boost ad revenues, the two best options are either to put more ads on the site—which would annoy users—or find more places to put ads. The latter means creating a network of ad inventory across the Web, much the way Google’s Doubleclick sells ads and places them on sites like that of the New York Times (NYT). This would give Facebook far greater reach, but could also give users the creeps. Imagine updating your Facebook status (“Really loving that new Carly Rae Jepsen song!”) and then seeing ads to buy the track Call Me Maybe at every site you visit.

… or do something besides advertising

Currently Facebook’s only source of non-ad revenue is its digital currency, Facebook Credits, which people use to buy virtual goods, such as tractors in FarmVille (ZNGA). During the first quarter of 2012, payments grew to make up almost 18 percent of Facebook’s revenue—close to $200 million in total. Overall, though, fewer than 2 percent of Facebook’s users have bought virtual goods with their payments option. There’s a lot of potential growth, in other words, along with hints that a big online operator such as Spotify may begin accepting Facebook Credits in the future.

Facebook has plenty of revenue options beyond payments and advertising

Facebook is a force: It accounts for 9 percent of all online visits in the U.S., according to Experian Hitwise, a company that measures website traffic. Hitwise also says that Americans spend an average of 20 minutes per Facebook visit. Worldwide, nearly 1 billion people have a Facebook profile. As investor Chris Dixon puts it, Facebook has real assets—including “a vast number of extremely engaged users, its social graph, Facebook Connect”—and should be able “to monetize through another business model,” apart from advertising. It could create the Social Smartphone, sell data analytics products, charge for higher-res photo and video storage, or perhaps hawk vintage Mark Zuckerberg hoodies.

There’s already a “Facebook Mafia”

Heard of the PayPal Mafia? Former executives from the online-payment provider have gone on to start big-time tech firms, such as LinkedIn (LNKD), Yammer, and Yelp (YELP). (And one member, Peter Thiel, cut the first big check for Facebook.) A Facebook Mafia has already emerged, and members have founded Asana, Path, andQuora. The Facebook Mafia is real, even though the name could use some work, says Dave Morin, Path’s chief executive officer, who previously developed Facebook’s development platform. “I guess we can’t escape from calling it that,” he says.

Facebook goes where Google won’t in photos

Facebook owns one of the largest photo repositories in the world, and its facial-recognition technology is getting a workout scanning them all, with more than 300 million photos uploaded per day. Facebook stores 60 billion images, a whopping 1.5 petabytes of data. For each uploaded photo, Facebook stores four images of different sizes. The site shows as many as 550,000 images per second. This is an area that has upset privacy critics and represents something that Facebook is willing to do that even Google isn’t: Google’s Eric Schmidt said last yearthat the company had built an app that would let people snap photos of others and identify who they are but decided not to release it, due to privacy concerns. Google and Facebook both have sophisticated facial-recognition technology, but Google requires users to opt into its photo-tagging service. Facebook users are included automatically.

Facebook’s new campus could be cursed

Late last year the social network moved into a 57-acre site in Menlo Park that was previously inhabited by Sun Microsystems. Sun’s fortunes soured shortly after the computer company took up residence there. The same thing has happened, in different times and places, to software-maker Borland, Silicon Graphics, and even Apple (which nearly went bankrupt three years after it moved into its current Cupertino, Calif., headquarters at 1 Infinite Loop). The good news: Companies that move into pre-existing campuses seem to fare better. Google, for instance, took up residence in SGI’s old digs.

Up north, Facebook is the only thing better than hockey

Facebook is one of the top two websites in every country except China. The social-networking site is most loved in Canada, where it wins 12 percent of all online visits.

Source: Businessweek.com

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Social Media and Luxury Brands: A New Era

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Stephane Galienni, founder and director of digital media experts BalistikArt, explains the leading digital marketing technologies and how they relate to luxury brands.

2010 was a turning point for luxury brands in their conquest of the digital world. With the new opportunities provided by social media – where the conversation takes place – and by the blogosphere – where opinions are voiced about brands – a major shift has occurred. From a society of communication, we have moved to a society of recommendation.

Today we are experiencing a mobile and social Internet, ruled by the notion of “every time, everywhere” in which the C-to-C conversation becomes permanent and real-time and is held in a written mode. A French proverb says: “Words are fleeting, writings remain” and Google is always there to remind us of this. Social media can become uncontrollable for prestigious houses, as was recently experienced by Guerlain.

To ignore what is happening in social media is like delegating the brand’s power of expression to the first passerby. Digital strategy in luxury is not about a marketing operation using a 2.0 “Swiss army knife” with its array of gadgets. It is a true anticipation of the future communication challenges for the luxury industry.

Twitter, how to reflect timelessness in real time

Early 2009, no luxury house was to be found on Twitter. Today, they almost all have their Twitter feed, with the difficulty of reflecting their rich heritage in 140 characters. Why is writing the story of an esteemed brand in real time so complicated? Literary inspirations and creative storytelling can enrich the live feed of a luxury house. Imagine the experience of discovering an unfolding story around the Hermès “Echappée belle” ad campaign, or regular telegraphs sent by a Vuitton traveller.

Facebook, luxury masstige

Facebook, with its 580 million members around the world, is a further godsend to luxury masstige and in particular for fragrance and small leather goods. The dream becomes accessible to all with one click, from fan page to e-commerce. The hundreds of thousands of fans who join the pages of luxury brands are voluntary and motivated, but unlike the customers who enter a store, there is often no one to say: “Hello, can I help you?”

Social Relationship Management, or SRM, is an initial response to social media strategies, because luxury is primarily a matter of customer service. Social Relationship Managers can provide a daily service similar to that of a butler or concierge, listening and providing personal advice for each of its customers or fans.

Front Row Bloggers

It is now common practice to have bloggers in the front row of fashion shows, as they are the first to tweet live and quick to post articles on a new collection. Bloggers are content creators, passionate and technically savvy, capable of getting the word out on Google faster than online magazines. The paradox of embargoed press releases and information leakage on the blogosphere is a new issue of communication timing in a digital environment. PR departments have to rethink their methods so that they can address different audiences simultaneously by developing a form of transversal storytelling.

What is next? If social media was the trend in 2010, in particular with the spectacular acceleration of Facebook, 2011 will be the year of the mobile web. The QR code technology, for example, opens new opportunities for luxury advertising as it provides content to mobile users from a billboard or a point of sale. With a pocket internet connection and geolocation-based services, the media is closer than ever to the end user and offers a fabulous new perspective on brand content.

Source: Luxurysociety.com

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