Why Facebook is a leading social media player

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Facebook

Facebook is a leading social networking company located in  Palo Alto, California, whose mission is to make the world more open and connected.

As of September 30, 2013, it had 1.19 billion monthly active users out and had 727 million daily active users on average. Approximately 80% of its daily active users are outside the U.S. and Canada. It said 874 million of its users have used its mobile products.

Monthly Active Users (MAUs)

The company states that it’s in the early stages of pursuing its mission, and that it has a significant opportunity to further enhance the value it delivers to its users, developers, and marketers. The key elements of its strategy are as follows.

Expanding its global user community

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Facebook aspires to someday connect all Internet and mobile users worldwide. As of September 30, 2013, it had 1.19 billion monthly active users (or MAUs), an increase of 18% from September 30, 2012. Users in India and Brazil represented key sources of growth in 3Q 2013 relative to the prior year. The company continues to focus on increasing the number of people using Facebook across all geographies, including relatively less-penetrated, large markets such as Brazil, India, Mexico, and Japan. Facebook intends to increase the size of its network by continuing marketing and user acquisition efforts and enhancing its products, including mobile apps, in order to make Facebook more accessible, useful, and engaging.

Building great social products to increase engagement and provide the most compelling user experience

Facebook prioritizes product development investments that it believes will create engaging interactions between its users, developers, and marketers.

Making its mobile products engaging and easily available

Facebook is continually developing mobile products and experiences for a wide range of platforms, including smartphones and feature phones. Plus, it’s working across the mobile industry with operators, hardware manufacturers, operating system providers, and developers to improve the Facebook experience on mobile devices and make Facebook available to more people around the world.

The company said its worldwide mobile MAUs increased 45%, to 874 million, as of September 30, 2013, from 604 million as of September 30, 2012. In all regions, an increasing number of MAUs are accessing Facebook through mobile devices, with users in India, Brazil, and the United States representing key sources of mobile growth over 3Q 2013 compared to the same period in 2012. There were 254 million mobile MAUs who accessed Facebook solely through mobile apps or Facebook’s mobile website during the month ended September 30, 2013, increasing 102% from 126 million during the same period in 2012. The remaining 620 million mobile MAUs accessed Facebook from both personal computers and mobile devices in September 2013.

Enabling developers to build great social products using the Facebook platform

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The success of Facebook’s platform developers and the vibrancy of its platform ecosystem are part of the company’s strategy to increase its user engagement. Apart from games, it works with leading app developers in categories such as news, movies, books, fitness, and music. Engagement with its platform developers’ apps and websites can create value for Facebook in multiple ways:

  • The platform supports its advertising business because apps on Facebook create engagement that let the site show ads.
  • The platform developers may purchase advertising on Facebook to drive traffic to their apps and websites.
  • Developers use Facebook’s payment infrastructure to facilitate transactions with users on personal computers.
  • Platform apps share content with Facebook that makes its products more engaging.
  • Engagement with platform apps and websites contributes to the company’s understanding of people’s interests and preferences, improving its ability to personalize content.

Facebook continues to invest in tools and APIs that enhance platform developers’ ability to deliver products that are more social and personalized and that better engage people on Facebook, on mobile devices, and across the web.

Improving ad products for marketers and users

Facebook invests in advertising to attract more marketers to work with the company, to create more value for its marketers, and to enhance marketers’ ability to make their advertising more relevant for users.

History

The website launched in 2004 as “thefacebook” by Mark Zuckerberg and co-founders Dustin Moskovitz, Chris Hughes, and Eduardo Saverin. The founders had initially limited the website’s membership to Harvard students, but they later expanded it to colleges in the Boston area, the Ivy League, and Stanford University. Facebook gradually added support for students at various other universities before it opened to high school students and eventually to anyone aged 13 and over. The company was listed on May 17, 2012, at a share price of $38 apiece.

To see how Facebook (FB) is trading versus Twitter (TWR), see Must-know analysis: How is Twitter trading versus comps?

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