Facebook’s Five Major Challenges

Loyalty and Commitment

Without a doubt, it is the main challenge that awaits Facebook over the next few years, that which got the better of shooting stars MySpace or SecondLife: How can a service that manages to seduce more than 1.2 billion people every month across the world avoid becoming worn out? How can it resist the rise of alternative actors, whose novelty is their main attraction? Surfers are fickle: Just as they were eager for Facebook when their friends invited them to join, today they do not hesitate to spend time on Snapchat, Line and WeChat.

Facebook’s recent initiatives are trying to respond to this threat. The social network is banking on Instagram, the photo sharing application, for which it paid a high price two years ago — $750 million — to renew interest among young people, who are more comfortable with images. It has also just launched Paper, a news aggregation application similar to Flipboard, to try to keep control of the information flow shared everyday on its network. Finally, a recent algorithm change has had the effect of putting photos and shared links even higher up, to the detriment of ordinary statuses, which generate less interaction. The objective is to increase the length of use in order to increase the value of advertising.

Internationalization

While Facebook has opened offices around the world, the company remains very American. The North American market still represents the majority of the social network’s revenues, and Facebook better monetizes an American user than an Indian user, or even a European one. Therefore, in order to become a truly comprehensive company, it must forge strong links at the local level with the media, e-merchants, cultural industry, or even the digital ecosystem. That is what it has done in France, particularly since it was set up there in 2009.

However, there remain markets where Facebook is still almost completely absent. In addition to China, where just like with Google, it will be difficult to break through, Facebook has not managed to insert itself into the Russian market, where it faces competition from local operator Vkontakte, or in some emerging countries, where access to the Internet remains problematic. Mark Zuckerberg has understood this well; along with other patrons of the Web, he has taken the initiative with a project aimed at increasing the worldwide connection rate. The Californian company also sometimes subsidizes access to its service for local operators.

Private Data

The battlefield around personal data has calmed down a little recently, with the regulatory authorities visibly satisfied by the guarantees Facebook has provided. The social network has also been able to make gestures of good will, such as when it recently stopped the “sponsored stories” format, which were accused of being much too intrusive, and for which the company might be condemned to pay large amounts of damages and interest. However, the Snowden case shows that the giants of the Web have a strong sense of responsibility, and that users are now very vigilant about the use of their data. Facebook, like the others, is not immune to a new scandal.

Management

For the time being, Facebook has been able to avoid the “post-IPO blues.” It is true that the top management — the number-two, Sheryl Sandberg, or financial director David Ebersman — has been interested in the stock market performance of the company, and the social network was able to avoid losing some of its executives and the generation of millionaires that its NASDAQ entry has generated. However, some clauses are about to expire, and by definition, developers are a fickle group, attracted by freer structures. Even Google was recently unable to prevent the departure of some of its most talented engineers. Facebook’s response is to offer a more adaptable working structure. The company has been elected “Best Place to Work in 2013” in the U.S. and, for several years, has been in the top group of this rating by Glassdoor for Forbes. It notably offers its employees free food and a free transportation network, a substantial premium for young parents, and even a laundry room.

An Ecosystem to Structure …

While Facebook has gathered a start-up galaxy around itself, its ecosystem has not yet reached the size of Google or Apple. To rise to the level of these giants, perhaps, it will have to explore new fields, such as browsers or operating systems.