Facebook Changes Post IPO
I recently wrote that the ascent of Facebook might be coming to and end – growth plateauing, mind you, not declining. Facebook is maturing in developed markets and there is evidence that its popularity is waning among young users as alternatives emerge. No doubt, the IPO will likely spawn more Social competitors.
All that being said, Facebook has critical mass and should be an integral part of your Social Media strategy. Close to 100 million Americans are on Facebook and spend about 7 hours per month there. If your brand isn't there it should be.
Is Facebook likely to become a different company post IPO? I think so. For one thing, the already cash-rich company will be raising another $5 billion. Second, the company indicated in its IPO documents that capex (investment in property, plant and equipment) will increase from $606 million in 2011 to between $1.6 and $.8 billion in 2012. That's a huge increase in spending – more than 2x the company's revenue growth rate.
I think it's safe to assume that Facebook is going to be moving into new areas and not just adding capacity. Without delving too much into what the following changes could mean for your Social Media strategy, let's consider some of the possibilities. Some of these might seem far-fetched but Facebook is a company that has dared to dream big.
Games – Zynga virtual goods is an increasingly important revenue stream for Facebook. Continuing to Decrease Facebook's reliance on advertising revenue is important. While buying Zynga (current market cap is ~$8.6 billion) is unlikely, Facebook could buy a smaller game developer or build one in house.
Hosting – Many small businesses have a Facebook page as their main or sole web presence. Could Facebook be building out a web services/hosting business to cater to these companies as they grow? It's possible.
Search – This is a big one but I can't rule out the possibility that Facebook will go head to head with Google in search. It's obviously a huge market. The almost immediate success that Facebook could have has obvious implications for SEO.
Travel – Facebook users love discussing vacation plans and stories on Facebook. Will they be able to book vacations on Facebook soon? Also possible.
Facebook Pro – For many users, Facebook has almost all your personal information. Why not add your professional information. I wouldn't bet against Facebook developing a sister site that competes with LinkedIn
Offers – Groupon's success has attracted a lot of competition. Facebook's new riches will probably mean they put more resources into Facebook Deals, or whatever it will be called.
Streaming – Without having a clear view as to how all the content licensing deals will end up being structured, I think a streaming service to compete with Netflix and traditional carriers is real possibility. You may recall that when the Batman flick Dark Knight came out, there was a "watch now" link on Facebook. If you are one of the more than 50 million Americans that is spending more than 7 hours per month on Facebook, you might want to watch a TV show, movie or other video while you are there.
There are countless other possibilities given the deeper pockets that Facebook will soon have. Feel free to leave thoughts on upcoming changes at Facebook in the comments section below.
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