Face book Assignment1.0 IntroductionFace book is a website that was launched in the year 2004 and Mark Zuckerberg was responsible for this innovation. Mark was helped by his friend Eduardo Saverin and a few other course mates and roommates. The name Face book originated from the book that the friends had been given while still at school (Aune, 2007 p. 1). The main aim was to serve the purpose of connecting people socially. According to the analysis that was conducted in the beginning of the year 2011, the total members who had registered were around 600 and were utilizing the site actively (Carlson, 2010 p.
1). The website was initially accessible to university students but it was later expanded and allowed the entire public. Once a person attains membership, he/she is required to create a personal profile then they may search for friends. Then after their friends requests are confirmed, they are able to freely exchange messages that are automatically notified. The compete. com study ranked the face book group as the link that was mostly being used all over the world by the January of year 2009, for socializing and networking services by the users who could pay their worldwide monthly bill.
This trend is continuous and according to a survey conducted by the social Media today, by April of 2010; at least 41.6% of the U. S population had registered as members (Carlson, 2010 p. 1). This paper aims at reporting on the way face book conduct its business. 2. 0 Face book BackgroundDuring the 2004 summers, face book was incorporated by the businessman by the name Sean parker, who was the adviser of Zuckerberg.
He later became the company’s president and it operation was shifted to Palo Alto in California. Its first investment was from pay pal which was co-founded by Peter Thiel. The major personnel’s who were involved in management of the company comprised of Chris Cox, Sheryl Sandberg and Donald E. Graham who was the chairman. According to the survey conducted in April 2011, the company had employed over 2000 people and they had established offices in around fifteen countries (Carlson, 2010 p. 1). 3.0 How the Company Earns its RevenueThe face book company mainly makes money from the advertisements that are placed through the website.
Banner advertisement is mainly used by face book through the partnership of Microsoft adversory inventory. Another strategy of attracting more members is by providing the lowest click Through Rates (CTR) than any other major website. The manager in charge of operating the company commented that the most appropriate advertising campaigns should have rates that are between 0.05% and 0.04% to enable effective competition between the company and that of other similar companies like MySpace (Carlson, 2010 p.
1). On the pages with products and brands, certain firms have managed to acquire sales as high as 6.49% whereas face book had by July 2008 attained only a CTR of 0.7%. On the other hand, for the video advertisements, about 40% of their users viewed the whole video and the company made 25% of the in banner video ads. The following table displays the trend of the revenue that the company had managed to get from the year 2006 to 2010 (Clara, 2009).