• 07/27/2012
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What's Next For Facebook

Facebook's first earnings report as a public company was a mixed bag. Do you agree with our experts about what's next for the social network?
5 Social Networks To Achieve 10 Business Tasks
5 Social Networks To Achieve 10 Business Tasks
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Thursday was a good news/bad news day for Facebook. In its first earnings report as a public company, it reported that revenue was $1.18 billion, up 32% compared with the same period last year (and in line with analyst expectations). It also reported a $157 million loss for the three months ending in June, and share prices fell to a record low in after-hours trading.

So what's next? The BrainYard gathered some opinion on the topic, and, more importantly, we'd like to hear what you think. We welcome your comments at the bottom of this page.

Michael Raanan, president of Landmark Tax Group and a former IRS revenue officer, has seen evidence of Facebook frustration. At a recent tax and law forum he attended, many of his colleagues said they feel that Facebook does not serve a significant advantage for business owners and that other social networks are filling the gaps.

"Facebook limits actions that owners with business profiles can take, such as 'liking' other pages and posts," said Raanan. "Twitter does a great job of providing a way for businesses to advertise in real time, and Pinterest provides a way for businesses to leverage advertising and marketing with a more visual element."

Gina Schreck, president of SynapseConnecting, is also seeing what has become known as "Facebook fatigue." Part of this, she said, can be attributed to users' desire to try what's new, but Facebook also isn't doing enough to engage individuals or businesses.

[ Consider 9 Facebook Buttons We 'Want' To See. ]

"I do see trends that point to Facebook burnout--one being more and more young people moving away from Facebook activities and discovering Pinterest and other new kids on the social block," said Schreck. "I also hear more adults talking about Facebook exhaustion and businesses tiring of trying to engage fans to beat EdgeRank. As much as Facebook says they are focused on helping small businesses thrive in Facebook Land, charging to promote posts to the fans you already have, and still not having a fully functioning mobile app to manage business pages from, shows they still are not listening to the majority of their users."

Dr. William J. Ward, a professor at Syracuse University's S.I. Newhouse School of Public Communications, agrees that Facebook must move the platform--and its users--in a more business-oriented direction.

"Many business are still learning how to do social media and Facebook well," said Ward. "The Facebook of the future will need to continue to evolve the ecosystem to harness it for e-commerce, transactions, B2B, and other professional and enterprise purposes. Continued growth will require Facebook to move consumers' brand perception beyond a backyard barbecue-only style of social media."

It's not all doom and gloom we've been hearing. Matt Karolian, social media manager at advertising firm Arnold Worldwide, sees a bright future for Facebook in e-commerce (although one that might sound a little scary to privacy-minded users).

"One area I don't see many people talking about is the potential for Facebook to move further into commerce," said Karolian. "Right now, Facebook has many of the pieces already in place for commerce to work in a big way--they are just not really connected yet. They have verified IDs, they have hundreds of thousands of local business owners set up on the platform, they know all of your preferences. Facebook Connect is the primary means of signup for many online services--they know your location, and, with very little work, they could probably know all of your account balances. It is really all there."

April J. Rudin of the Rudin Group sees a social evolution that will affect all platforms. She predicted not which platform will "win," but that there will soon come a day when we will be engaging with many platforms from a single hub. "Why must we be on so many platforms--Facebook , LinkedIn, Twitter, Google+, etc?" asked Rudin. "Eventually, I predict, each person or business will have a central 'hub' on the Internet through which all messaging goes, including voice."

In any case, with a fickle public that can move among social networking platforms at little cost, frustration with Facebook's many changes and lack of a strong mobile component, as well as new accountability to shareholders, Facebook truly has its work cut out for it. What do you see in Facebook's future? Please comment below.

Follow Deb Donston-Miller on Twitter at @debdonston.

Every company needs a social networking policy, but don't stifle creativity and productivity with too much formality. Also in the debut, all-digital Social Media For Grownups issue of The BrainYard: The proper tools help in setting social networking policy for your company and ensure that you'll be able to follow through. (Free with registration.)


re: What's Next For Facebook

The stock is trading down this morning, as investors worry that growth has slowed. Maybe I'm too focused on the glass half full, but the part of the report that jumped out at me is that they say they're pulling in $1 million a day in revenue on "sponsored stories" -- an experimental product that they've only started making more widely available to advertisers and one that has better potential to translate into a more mobile-centric era of social networking. If they can ramp that up without overdoing it and alienating users, while continuing to build other revenue sources, Facebook will do just fine. Then again, my interest is in it remaining viable as a service -- I don't claim to be a stock picker.

re: What's Next For Facebook

I don't think for a minute that Facebook is going away, but I do think, based on what I hear from people, that "Facebook fatigue" is a real thing. Facebook can create the best advertising platform ever for businesses, but what I think they need to maintain focus on is those 900 million-plus users. If the value of the platform diminishes for them, the value diminishes for businesses trying to leverage Facebook. Which is, I think what you are saying, so I agree :)

Deb Donston-Miller
Contributing Editor, The BrainYard

re: What's Next For Facebook

Facebook is doomed to eventually sideline itself - or it could completely disappear from relevance just like MySpace.

It was originally created to allow our youth to get in touch and to communicate with each other. Now that the biz set has jumped in with both feet, it has morphed into something they think will capture young minds and their dollars. After the Herculean effort spent on that goal... is it really working out for them?

The Facebook experience has been severely diminished. What we see now is everyone starting to move on to the next big thing...

re: What's Next For Facebook

Thanks for your comment, AustinIT. It should be interesting to see how all of this plays out.

Deb Donston-Miller
Contributing Editor, The BrainYard

re: What's Next For Facebook

Thank you for your comment, Eric! I had four 16-year-olds in my car today (on the way to a softball tournament), and I asked them about their Facebook use. All of them said they check it only once in a while--maybe once a month. "Facebook just isn't Facebook anymore," said one. I'm not saying that is any kind of scientific survey, or that businesses are necessarily trying to reach 16-year-old girls. But some are, and I think that young people bring with them a lot of energy and influence. Currently, these girls at least, are applying theirs to Twitter.

Deb Donston-Miller
Contributing Editor, The BrainYard

re: What's Next For Facebook

Would you trust a new CEO coming in on issues like privacy more than you'd trust Zuckerberg? He is certainly aggressive, but at least he understands the medium. I'm not sure that someone bringing in "adult supervision" would get the company going in a better direction.