Just a few days ago Facebook forced out there CFO Gideon Yu. Amid his dismissal was a litany of questions within the tech community. This was Facebook’s third CFO in two years and the news comes on the heels of their VP of Business Development departing. Now the question everyone is asking, “What is going on at Facebook?”
With Facebook’s meteoric growth rate, relatively small revenue stream (if you consider $400 million small), controversial redesign, and baby faced CEO, many people are starting to wonder if Facebook is actually on the verge of collapse. Facebook is enjoying a phenomenal growth rate, but might it be too fast? Facebook’s recent re-design caused quite a stir, more so than previous redesigns. The more prevalent Facebook gets with different generations, the harder it will be for Facebook to keep everyone happy. Mark Zuckerberg’s grandiose vision is to connect everyone in the via Facebook. That’s a tall order considering their average pages viewed per session has declined since the new design. Is this redesign and declining user participation initial signs of a falling Facebook?
A drop in user participation would be a colossal blow to Facebook’s vision. A hot topic with Facebook is their annual revenue. Like any other social network site, people ask what is the business model? How do they plan on monetizing the site? The answer is: Advertisements. Many will argue that is not a business model, I say those people went to business school 10 years ago. While my rebuttal might not be entirely true, last time I checked Google’s revenue comes from search engine advertising. Facebook has the ability to sell highly targeted advertisements, which they do, but they limit the number of ads per page (on purpose), thus giving them the ability to generate more revenue…if they choose. Facebook has created an enormous user base, but if it’s users continue to view fewer pages per session, that could inhibit their future ad revenues.
That still leaves the questions: why was Gideon Yu fired, is there a power struggle behind the Facebook walls, does Mark Zuckerberg have the ability to continue running this company, and is there a possible IPO in Facebook’s near future? Come back Tuesday for the rest of “What is going on at Facebook” including my layman’s opinion of their future. But don’t forget there is a vlog on Sunday!
