Facebook Business Model
1. Key Partners
Key partners
Internet service providers for example google, yahoo, telecommunication companies among others
Advertising agencies
Multinational companies, small and medium firms
Community of users
A large community of users provides the main reason for the existence of Facebook in the global competitive market
Soft ware developers
Developers of Watsapp, messenger and Instagram are considered to be key partners by Facebook
2. Key Activities
Key activities
Data center operations and management to collected and analyze huge data sets and to protect the privacy of personal data for the community of users
Products development and enhancement
Facebook invests a lot of time and other resources in the activity of innovating new products that matches the needs of its community of users in order to dominate the global market shares.
3. Value Proposition
Social platform to connect, share and communicate
Facebook uses online platform to facilitate connecting people, information sharing and general networking to create value
Relevance, engagement and social context online interactions
Facebook provides its users products which are relevant to its community of users.
4. Customer Relationships
Strong networking effects
Facebook is a strong online social network that has succeeded in forming global community of users.
Peer-peer relationship
Facebook customer relationship approach is matching a community of users with online service providers for example facebook online market place which links traders and buyers
Advertising agencies and companies
These include all companies that advertise their products using facebook for example Qatar airlines
5. Customer Segments
Internet users
Billions of people have subscribed to facebook as their favorite social media for both group and individual communication, advertising and information sharing
Mobile device owners
For example, over the last one decade millions of people have acquired smart phones and tablets just to help them use facebook and watsapp at their convenience
6. Key Resources
Key resources
Facebook uses a wide range of resources which include data centers, intellectual properties or human resources, financial resources, research centers, internet, social networks among others
Strong cyber security
Facebook uses strong antivirus soft wares to protect its community of users from online hackers of personal data
7. Channels
Channels
Facebook websites and mobile applications. For example Facebook lite, messenger, Instagram, watsapp. Facebook also uses Oculus virtual reality technology and content platform that allow people to enter an interactive environment to play games, consume content and connect with others.
8. Cost Structure
Facebook Cost Structure
Facebook key costs include data center operations costs, credit card fees, inventory costs, research and development costs, and marketing and sales costs. Generally, these are both operational and capital investment expenses.
9. Revenue Streams
Advertisements
Facebook generates the largest share of their revenues through advertisements. Facebook matches potential customers with companies advertising their products for example watches, cloths, affordable accommodation. Marketers pay for ad products either directly or through their relationships with advertising agencies
Direct payments and other fees
Payments revenue is comprised of the Facebook receives net fees from developers using its Payments infrastructures. Other fees revenue consists primarily of revenue from the delivery of virtual reality platform devices and other sources.
