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Facebook Reaches a Billion. Now What?
By: Greg Dorn
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Let's cut right to the chase. We've seen the movie, heard the accusations of intellectual property theft, and witnessed Facebook's rise from its "humble" beginnings in the privacy of a Harvard dorm room. The story has been examined and done to death (thank you very much, Justin Timberlake and Andrew Garfield). The aforementioned and critically acclaimed film "The Social Network" boasted the tagline, "You Don't Get to 500 Million Friends Without Making a Few Enemies." By the time the movie had hit theaters, the social network giant had tacked on few extra hundred million users. And now, the brainchild of Mark Zuckerberg (or the Winklevii twins, for all you crew fans) has amassed an unprecedented 1 billion active monthly users. To put things into a greater perspective, 1 out of every 7 people on Earth has a registered Facebook account. This certainly sounds good on paper. But for an Internet site that has reached a 7th of the world’s population, how can the company be in so much trouble?

Like Google, Facebook obviously has an enormous field of data (or users in their case) to work with. However, unlike Google, Facebook simply has not yet mastered the method of monetizing their database. The result has been the most anti-climatic IPO of all time. When the bell rang, Facebook saw their shares nosedive from the opening price of $38 a share to as low as $17.55 in early September. Sure, it has regained some ground, but the beyond reputable source, Barron’s still feels that the stock is way overvalued and should be around $15 a share.

The reason? Advertisement. While a billion does sound cool (as stated by JT’s portrayal of Napster co-founder Sean Parker), only about half of that number are on the site on a daily basis, mostly on mobile apps and devices. And what do these mobile apps seriously lack? Advertisement. Hence the reason why, since May’s IPO, Facebook employees on average have lost $2 million each, COO Sheryl Sandberg $700 million and CEO Zuck-Dawg a whopping $10.5 billion. Facebook may be able to assert their billion-user milestone to the public, but without a consistent source of revenue to align with that number, what is there to brag about?

Now that Facebook is a public company, they have repeatedly assured investors that capitalizing on their mobile audience, hence improving their mobile applications, would be their number one priority. We’ve seen some indications that the wheels have been spinning. New apps such as the Facebook Messenger and Facebook Camera have seen heavy usage and glowing reviews. The new iOS app, ridiculed for many years, has finally been baked into the iPhone's software, vastly improving its speed and ease of use.

While the general public may be benefiting from app enhancements, all is not well in Facebook’s silicon valley HQs, and the shareholders are feeling the heat. With stock continuing to plummet, company morale is reportedly at an all-time low. Apparently, many employees had planned to sell their stock well above the IPO price once the lock-up period expires at the end of October. If Facebook’s stock continues its gradual fall from grace, the talent needing to change their game plan and improve revenue stream might not be the greatest motivation to hit the ground running. So while a billion users sounds like all is well in Facebook’s world, not a single one will matter unless that stock sees a drastic change. 


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About the Author
Greg Dorn is a blogger, writer, and obsessed with everything technology and social media. Greg is absolutely captivated with the recent advancements in mobile gadgets, making our world more seamlessly connected. You can learn more about him on his own blog here
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