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Facebook IPO

1st Place - Principled Business Leadership Institute Case Competition 2013

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Facebook IPO

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  1. Facebookinitial public offering Zenith solutions Alpha Kappa psi

  2. Key issues • We will provide solutions for the following: • Decision between monetizing through advertisements or third party platform apps • Adapting to social media trends • Facebook's privacy issues • Facebook’s decision to go IPO • How Facebook performed since the IPO

  3. Key • Conclusions

  4. Company background • “Facebook’s mission is to give people the power to share and make the world more open and connected” • World’s largest and most successful social network • Over 1 billion monthly active users • 2011 revenues of $3.7 billion come from: 90% advertising, 10% commissions on sales of virtual goods by third party developers

  5. User growth (in millions) 1,056 845 608 360 145 58 12 6 1 2004 2011 2005 2006 2007 2008 2009 2010 2012

  6. PROS & CONS OF IPO PROS • Stock options can be offered to employees • Increased prestige and visibility of brand • Expand growth through investment • Finance acquisitions of other companies • Stability and support over time Company Incentives 1 2 Long-term Growth CONS • Obligated to please share holders • Centralized around revenue instead of UX • Need approval of majority of shareholders • Company is required to be transparent Decrease in Control 1 Change in User Interest 2

  7. Facebook IPO May 18th, 2012

  8. Performance post ipo

  9. Facebook vs. Google - post ipo

  10. Stock comparison Google Facebook

  11. Mobile

  12. Mobile How we connect COMPUTER 2011 | 2012 MOBILE PHONE TABLET E-READER

  13. Mobile Time spent on social media 23.2 4.2 5.4

  14. Is advertising effective? • Mobile • Mobile • Mobile

  15. Mobile Advertising and User experience

  16. Facebook revenue • Mobile • 2010 • $1.86 billion • TR = $1.97 billion • 2011 • $3.1 billion • TR = $3.7 billion • 2012 • $4.28 billion • TR = $5.09 billion • 2013 • $5.48 billion • TR = $6.6 billion

  17. Revenue through platform apps • Mobile

  18. Popular features • Relevance

  19. Areas for improvement • Relevance

  20. Facebook users’ privacy concerns • Relevance • Search

  21. Relevance

  22. Social search

  23. International

  24. International

  25. summary Zenith Solutions Final Proposal • Go forward with IPO with lower valuation to ensure success • Create new revenue streams while maintaining current streams • Mobile, Relevance, Search and International

  26. Thank you

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