Facebook Harvard Case Solution & Analysis

1.   Early investors include those listed below. In one sentence each, who are these people and firms?

a.   Mark Andreessen
b.   Reid Hoffman
c.   Mark Pincus
d.   Accel Partners
e.   Greylock

  • They all belong to the angel investors and venture capitalist of the Facebook. Mr. Zuckerberg has raised their capital through this source to meet its expense. The Mark Andreessen, Reid Hoffman and Mark Pincusbelong to the angel investor’s side.
  • On the other hand,Accel Partners and Greylock are the venture capitalist. The Angel Investor and venture capitalist are same in the nature, but difference lies in the mode of the business. Both provide finance to the company with different aspects.

2.   What were actual advertising revenues, payments and other fees revenue, and total revenues for 2010, 2011 and 1Q12 according to their S-1 filing dated May 9, 2012?

  • According to the S-1 filing on May 9, 2012 the actual revenue of the advertising and payments & other fee revenue from 2010 to the first quarter of 2012 are $1868, $3154, $ 1789, and $13, $106 & quarter payment and other fees includes in itself respectively.
  • These revenues are made according to the method of the company`s revenue streams and their way of paymentmode. In the case exhibit 2 shows the revenue combined with the advertising and other fee revenue. From this impact now the total value will be $1974 for 2010, $3711 for 2011 and $1789 for first quarter 2012. These all values are in millions.

3.   Per the May 9th S-1, how big is the online global advertising and the virtual goods/payments markets in 2011 and how large are they expected to be in 2015?

  • The Global Advertising was increasing rapidly and estimates the market position as per the changes evolved. They estimate the spending with respect to the advertising at $ 588 billion in 2011 while in the 2015 they are forecasted about $691 billion which is a big amount.
  • The online advertising is forecasted to the rise up to $68 billion from the year 2010 to $120 billion by 2015. These are good market difference which was created by them. The balance of the Facebook`s sales was produced by its payments business, which came from exclusively the sale of virtual goodswhich cast-off in the games. They sold games through the online gaming of the company Zynga. They are expected in the year 2015 which is near to 14 billion of the virtual goods of the gaming and social networking sites.
  • In the year 2011, consumers purchased nine billion worth of virtual goods from gaming and networking sites. On the other hand, they generated the fees in 2011 around $557 million, which shows their understanding of themarket sentiments and what is their future exposure of the Facebook.

4.   What percentage of total MAU’s is represented by Mobile MAU’s as of 1Q12?

a.   2011 – 425 Mobile MAU’s out of 845 MAU’s
b.   1Q12- 488 Mobile MAU’s out of 901 MAU’s

  • The percentage of total MAU`s represented by Mobile MAU in the first quarter of 2012 is 54% as compared to the last year 2011 which was 50%. The incremental percentage occurs from the both sides, the MAU is increasing by around 6.23% and Mobile MAU is increased by 14%. In short and simple both incremental percentage shows like 1.13% increased.
  • This effect arises due to the changes in the technologies and it will be beneficial for the Facebook and its requirements.

5.   In addition to advertising revenue, what are some other revenue components that may be important to Facebook’s revenue growth in the future?

  • In addition to the other revenue, the Facebook could incorporate some other online activities which will be important for the growth of the company. The Facebookcreates links with other social apps like game, social interaction with their location, providing business platform, page publicity, linked with current updates of the Twitter, TV channels, Provide intellectual knowledge with charging fees, and be the commission agent of the assignment of the future countries.

These things will add up more competitive edge to the company and boost the revenue streams of the Facebook. The organization should do something about this change because now the world isevolving around the IT and IT is changing its enhancementsday by day. It has to create the environment more technological as comparedto old methods of the business...................................

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