Facebook Business Model | Business Model Navigator

Overview:

Facebook is an American online social media and social networking service company based in Menlo Park, California. Its website was launched on February 4, 2004, by Mark Zuckerberg, along with fellow Harvard College students and roommates Eduardo Saverin, Andrew McCollum, Dustin Moskovitz, and Chris Hughes. Facebook can be accessed from a large range of devices with Internet connectivity, such as desktop computers, laptops and tablet computers, and smartphones. Facebook has more than 2.2 billion monthly active users as of January 2018. Its popularity has led to prominent media coverage for the company, including significant scrutiny over privacy and the psychological effects it has on users.

Industries:

Information Technology

Services

Similar firms (based on pattern co-occurrence):

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3 shared patterns

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2 shared patterns

3 shared patterns

2 shared patterns

4 shared patterns

2 shared patterns

3 shared patterns

2 shared patterns

4 shared patterns

Business Model Patterns:

Digitization

How they do it: Facebook digitized a lot of processes around social interaction ranging from communication to sharing photos and organizing in interest groups.

Hidden Revenue

How they do it: Facebook is free for private individuals and businesses. The main monetization happens through the possibility for companies for targeted advertising.

Leverage Customer Data

How they do it: Facebook uses customer data to allow businesses to better identify target groups for their advertisements.

Lock-in

How they do it: Through the personal nature of a user’s Facebook network of friends, switching costs to other platforms are increased with a larger network of friends on the platform.

Long Tail

How they do it: Instead of offering their advertising solutions to few companies, through Facebook all kinds of companies and initiatives ranging from small to big in advertising budget can use the platform to target their audience. Although individual small customers may don’t have a big advertising spend, the amount of companies adds up to significant revenues.

Two-sided Market

How they do it: The experience on the platform for the individual user increases with the amounts of interactions he can have with friends, peers, brands and other associations.

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