Facebook: The New Face of E-Commerce
Facebook: The New Face of E-Commerce
Facebook is considered by investors as the new face of e-commerce, bearing in mind that it is world’s most visited social website. On top of that, Facebook has created an international audience, third in number after Google and Yahoo search engines. For that reason, investors have for a long time been attracted to not only market their commodities in their website, but also conduct business transactions with their prospective customers logged into the social website (Clemons, 2009).
Strategic and financial analysis had an impact in investors’ decision to back Facebook. Considering Facebook’s positive performance in the past, investors have backed the company in large numbers. Investors are aware of Facebook’s high revenue growth, which is attractive to investors. Additionally, its sustainable revenue growth together with its real revenue growth has seen many profit making organizations use the company to further their money-making endeavors (Clemons, 2009).
One of the strategies that Facebook has employed so as to receive a backing from large corporations and small investors, is its pricing policies, which make them enjoy a competitive advantage by locking in and adding new clients. The company is known for having a good control of its pricing policies by encouraging the positive pricing. Thai is why they are in a beter position to attract more investors (Clemons, 2009).
Another strategy that Facebook has employed to attract more investors is that it has gone mobile. They have done that in order to reach out to as many clients as possible all over the world. In fact, over one billion people in the world have mobile handsets. Enabling Facebook applications in their phones increases the number of people subscribed to the social website. This has the effect of raising the probability of global growth in years to come (Clemons, 2009).
The concept of convergence entails enabling divergent kinds of networks to perform similar tasks. Facebook, being the new face of E-Commerce should have the ability to provide a range of services over a single network. If I am to develop a good convergent network for Facebook, there are several factors which I ought to consider, attracting both clients and investors to the social website, hence enjoying a competitive advantage over other competing firms (Holmes, 1999).
Facebook has often made use of wireless medium more than it has used the wired medium of communication. A proper model of Facebook convergence should have both the wired and wireless media. This has the effect of hoisting the traditional business models and value chains. In the long run, there is competitive substitution as well as complementary merging of products and services at the same time (Holmes, 1999). It is also important to harmonize the infrastructures, contents, storages and storage capabilities of computer systems. This brings together communication industries, software and the internet, towards a common objective.
The most appropriate infrastructure should be selected for the emerging trend of network convergence. This is because the digital networks dictate which type of infrastructure should be used. Flexibility is thus important so as to accommodate new trends in convergence. There are three levels under which network convergence take place. These are at; transmission, terminal, and the service level. In the event that core technologies converge, the diversity of applications of services increases. Thus by coming up with such a model, the barriers posed by impropriety solutions which enable firms to integrated voice and data applications are dealt with (Holmes, 1999).
Facebook’s economic viability is on the rise especially internationally. This if for the simple reason that its membership growth by far surpasses those of competing social websites such as Twitter and MySpace. Besides, it is the only social website enjoying an international audience in the third position to Google and Yahoo. Therefore Facebook’s economic potential cannot be overlooked. For the 800 million active users of Facebook is an attraction to large multinational companies seeking to market their products and services (Traver & Loudon, 2005).
Facebook has shifted from the traditional e-commerce trend of companies merely advertizing their commodities over their website. It has also moved from the old norm of prospective customers being redirected to other pages upon clicking on an advertisement link. Instead Facebook now boasts of hosting the contents of these organizations. A Facebook user does not need to leave his Facebook page in order to conduct business transactions. The customers just purchase and pay their dues right within Facebook, increasing their level of commitments. Thus new companies have their pages in Facebook where they communicate with their clients and ease their transaction burden. This new wave of change makes Facebook remain economically viable in the face of economic depressions (Traver & Loudon, 2005).
While speculations are rife over the firm’s economic viability following the decline in the number of subscribers in the United States, international subscribers continue to rise by the day. To add on that, Facebook has a potentially lucrative market, even posing a competitive threat to the traditional search engines such as Google and Yahoo. The bone of contention is that Facebook is increasingly restructuring itself to become the world’s largest search engine (Traver & Loudon, 2005).
Clemons, E. (2009). Business Models for Monetizing Internet Applications. Journal of Management Information Systems, 26 (2), 15-41. Retrieved October 23, 2012, from http://www.ebscohost.com
Holmes, T. (1999). The Art of Convergence. Black Enterprise, 29 (10), 48. Retrieved October 23, 2012, from http://www.proquest.com
Traver, G., Loudon, C. (2005). E-Commerce: Business. Technology. Society. Wesley: Pearson.