Facebook Business Model

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Key Partners

  • Key partners
  • Advertising agencies
  • Community of users
  • Soft ware developers

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

Key Activities

  • Key activities
  • Products development and enhancement

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.

Value Proposition

  • Social platform to connect, share and communicate
  • Relevance, engagement and social context online interactions

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.

Customer Relationships

  • Strong networking effects
  • Peer-peer relationship
  • Advertising agencies and companies

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

Customer Segments

  • Internet users
  • Mobile device owners

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

Key Resources

  • Key resources
  • Strong cyber security

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

Channels

  • 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.

Cost Structure

  • Facebook 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.

Revenue Streams

  • Advertisements
  • Direct payments and other fees

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.

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