Facebook is one of the largest social networking companies around the world. The social networking entity started its operations in 2004. The original company founders are Mark Zuckerberg and other college classmates. Initially, Facebook started as a small social networking platform that enabled individuals within the institution to communicate and exchange their views through a single platform. This idea was actualized by like-minded individuals who had technical skills and knowledge to formulate and develop such a platform.
After the great success of the platform within the institute of technology premises, the owners decided to take the platform to the public platform in anticipation that the members of the society will accept the social platform. The company received tremendous growth and support from other companies that were operating in the field of technology. According to Facebook’s stock ratings, it is clear that the company has been performing wonderfully in the stock market as compared to other social networking companies around the world.
How the company makes a huge chunk of money
Many people wonder how Facebook makes money given that opening and running a social networking account is free. However, advertising remains to be one of the primary businesses of the company, which has helped the entity to record revenues of more than $500 million in 2017. It is expected that the organization will be able to make more than $1 billion in revenues, which has never been recorded in history by a social networking company.
There are other multiple methods that Facebook makes money, such as engagement ads, self-serve ads, and promoted Facebook ads. It is possible for a person to pay for premium posts, after which the post will rank higher on the Facebook timeline. There are other methods that the company uses to make money, such as selling social networking rights to other companies among different essential ways.
Facebook initial public offer (IPO)
Facebook had one of the most anticipated initial public offers in the history of internet companies. A significant number of investors were heavily prepared to invest in the social networking giant, which had a market capitalization of more than $104 billion. After a lengthy period of anticipation, where Marc Zuckerberg refused to sell the company to the public for many years, he finally decided to sell the company to the members of the public in 2012.
However, the much anticipated initial public offer failed to meet its expectations due to internal suspicions. Most of the shares that were being sold in the market were from the insiders. It is estimated that some individuals working in the company released about 57% of the stocks that were available for acquisition. This strategy created a perception that all was not rosy within the operations of the company. Some formed an impression that Facebook was a high-risk investment option that people should analyze before investing their money.
The progress of Facebook
Despite the low critical initial public offer, Facebook remains to be one of the leading social networking companies around the world. The company was able to use the funds collected through its initial public offer to expand its operations and enhance its competitiveness. It is common knowledge that other social networking companies have taken the world by storm. However, Facebook has remained steadfast in its operations and competitive capacity.
The progress of Facebook is out there for any market and financial analyst to see. The company has a ten-year master plan that involves incorporating multiple strategic policies that make the entity very inclusive, while at the same time, creating a strategic marketing plan that makes the company retain its competitive edge. One of the strategies formulated by the entity is ensuring that it has multiple hardware, which will play a vital role in enhancing internet connectivity in Africa and other dense urban areas around the world.
Facebook has another strategic plan that involves the acquisition of small and upcoming social networking platforms and other internet messengers to increase the revenues that the company generates. However, the company has experienced a fair share of problems regarding how it uses personal information. Security issues have been brought forward on how the company should protect personal data, while at the same time, playing a vital role in eliminating fake news.