Essay on Facebook

The Problem

Facebook is now the largest and most popular social media website in the world with a market share that puts it as the 5th largest website per market share in the world. The business model allows users to create a profile and join various types of networks. These network include college-wide, workplace, and regional networks. To extend its market share, Facebook continuously attracts members as a result of its brand identify. The website also includes tools that allow users to connect and interact with other users, including a chat feature, messaging, photo sharing and file sharing. These applications allow Facebook to be more engaging compared to its rival - MySpace. Facebook, provides application developers with a platform to continuously improve this medium while in parallel, making money and a name for themselves. Famous applications have earned a huge amount of advertising revenue. The main dilemma is for Facebook to find a way to continuously make a profit, using the information its users voluntarily provide without violating their privacy.

However, the when Facebook launched its Beacon advertising, this was "a nightmare" for users -- it offended their privacy. This was so because Beacon advertising service tracked customers' business behavior and updated them automatically on Facebook. Beyond this, it shared information, which users did not agree to and probably had not intention of sharing. In some cases, users' business activities were made public. On the flips side, Beacon advertising allowed Facebook to earn high revenue through the "pay-per-click" capability. "Pay-per-click" means that a company pays Facebook a portion of a dollar every time a user access their site/purchase a item from the site. However, the systems were able to capture and retain critical information on users, which included their name, gender, mailing address etc. In response to this, Facebook announced a change in its privacy settings, including an "opt-in" option for Beacon advertising.

In addition to this, the company's news feature and photo sharing data have also come under attack by users for privacy reasons.

More over, as a company Facebook does 99% of its business via an online platform, which is very volatile and uncertain, which has a huge implication on its future success? To continue with its business strategy, the company utilizes customers, suppliers, competitors as well as utilizing developers to innovate new products and services. The entire process is dependent on a efficient and effective information system and a sizable market share. The company's simple business strategy continues to provide success but it can also infringe on the trust of customers.

General Alternative Solutions

There needs to be a balance between what advertisers want to find out and what the not violating the privacy of users. Granted, Facebook has made several mistakes to violate the privacy of users, it still lacks information for advertisers. How to find the target market for ads companies without violates user's privacy is a complex problem. The solution may be as simple as collecting information form customers by telling them or asking them for the information. In turn, this would have a positive effect on the company since users would interpret this as being ethical. Also the reputation of the company would be sustained