2- SWOT Analysis

Strengths
1. Facebook is the largest social media network in the world, with over 1.3 billion current active users.
2. Facebook ended 2014 with record numbers: a total of 890 million users, 745 million daily active mobile users, and $3,851 million in revenue.
3. Facebook’s revenues from advertising totaled $3.6 billion, and $257 million in collected payments and other fees. Facebook advertisements can be highly targeted based on user demographics, such as location, age, gender, language, behaviors, and connections within or outside the advertiser’s current connectionreach.
4. Facebook spent 29% of its revenue dollars on R&D in 2014.
5. Revenues were up 57% in 2014.
6. Entrepreneurs and small business owners now must pay Facebook for their product service exposure if they want to receive higher volumes of distribution of their materials.
7. Facebook’s new “professional” service enables users to keep their personal postings, pictures, and identity separate from the professional and work content.

8. Facebook has a significant advantage versus its competition, given its reported 1.35 billion users who are active monthly and 864 million who use Facebook daily. The firm recently started Internet.org as a special service project to provide internet to the two thirds of the world’s population who currently do not have access to the Internet.
9. Instagram’s user growth is expected to climb to 21% in 2015, 15% in 2016, and 10% in 2017.
10. Facebook, Inc. has an extensive network of users which enables it to collect a large amount of data about its users’ demographics, their social connections, their interests, and their activities on the internet.

Weaknesses
1. Facebook does not have a formal vision or mission statement posted on their website.
2. Facebook has a hybrid complex structure.
3. Only 7% of revenues are derived from sources other than advertising.
4. Firm’s goodwill increased from $800 million in 2013 to $18 billion in 2014 after the acquisition of WhatsApp.
5. User information is used for advertisement targeting and because of this, user privacy has been hard to maintain. User information on Facebook is also not guaranteed to be kept private when a user accesses a third party website or app through any social login using their Facebook ID.
6. Facebook has been involved in constant litigation over the years, ranging from privacy suits to suits over their IP.
7. Mark Zuckerberg is both CEO and Chairman of the Board.
8. Facebook has a weak Click Through Rate (CTR), which hurts revenue. In order to gain more revenue, Facebook must change the way it displays ads.
9. Half of Facebook’s revenue is derived from the US and Canada, and 75% comes from the US, Canada, and Europe.
10. Facebook lacks pertinent features (i.e. Group Chats, Video Chats, Dislike Button).

Opportunities
1. LinkedIn has 332 million registered users, but only a third of those people frequently visit the site.
2. Twitter’s user growth is expected to decline to 9% in 2015, 8% in 2016, and 7% in 2017.
3. Both Twitter and LinkedIn reported negative net income in 2014.
4. Two thirds of the world’s population does not have access to the Internet.
5. Worldwide revenue generated from “in app” purchases was $4.6 billion in 2013 and is forecasted to increase to $36.9 billion in 2017.
6. The global mobile advertising market is expected to grow from $11 billion in 2013 to $25 billion in 2016.
7. In 2013, India, Brazil, andMexico represented key sources for growth for Facebook’s MAUs. It is likely that growth in these countries will continue over the next few years.
8. Number of mobile internet connections is forecasted to grow from 234.2 million connections in 2014 to 313 million connections in 2019.
9. Global market for video games is projected to grow from $67 billion in 2012 to $82 billion by 2017, with mobile and smartphones accounting for much of the growth in the portable games category.
10. Millions of children become first-time Facebook customers annually.

Threats
1. LinkedIn is the leading business-oriented social network.
2. Many workers lose significant productivity at work by spending too much time on Facebook resulting in many companies banning using Facebook while at work.
3. Facebook has received a lot of bad publicity over the years from the media and from its users in regards to privacy issues associated with user profiles.
4. Social media users increasingly feel commercialized when pop-up ads cover their computer screens while surfing socialmedia platforms.
5. Employers are increasingly searching social media sites to learn about potential employees.
6. Facebook has been or is currently restricted whole or in part in China, Iran, and North Korea.

Governments in other countries can also seek to restrict access to Facebook if they consider Facebook to be in violation of their laws.
7. YouTube is projected to bring in $1.13 billion in 2014 video advertising revenue, which makes up

a total of 18.9% of the overall digital video advertising market.
8. A Gallup survey conducted in 2014 of 18,000 people found that roughly 62% of the people surveyed said that social media has no influence at all on their buying decisions.
9. Facebook faces regional threats from foreign social networking sites such asWeibo and Renren in China.
10. Facebook is a prominent target for cyber attacks which may harm Facebook’s reputation and ability tomaintain existing customers.

SOStrategies
1. Spend $750 million on further developing a professional networking site based off of Facebook (S2, S3, S4, S7, O1, O3).
2. Acquire Twitter for $18 billion (S2, S5, S8, O2, O3).
3. Invest $400 million in advertising to social media users and businesses in emerging markets (S2, S7, S9, O4, O6, O7, O8, O9).
4. Invest $500 million more into data analysis to better understand its customers and trends (S10, O5).

WOStrategies
1. Develop a clear vision and mission (W1, O5, O7, O8, O9).
2. Invest $400 million to further penetrate the video game market (W3,W10, O9).
3. Invest $400 million in advertising to social media users and businesses in emerging markets (W9, O4, O6, O7, O8, O9).

STStrategies
1. Spend $750 million on further developing a professional networking site based off of Facebook (S2, S3, S4, S7, T1).

2. Invest $500 million more into data analysis to better understand its customers and trends (S10, T4, T8).
3. Develop a video platform to rival YouTube directly (S8, T7).
WTStrategies
1. Facebook must develop a clear vision and mission statement, along with developing a clearer organizational structure for $200 million (W1,W2,W7, T8, T9).
2. Develop a full line of games ranging in cost from $0.99 to $9.99 (W3,W10, T4, T8).
3. Invest $400 million in advertising to social media users and businesses in emerging markets (W9, W10, T9).
4. Invest $300 million in the legal department to better resolve legal and privacy concerns (W6, T3, T10).