The Development of Facebook’s Business Model

CB613: Business Model of Facebook | March 17

2014

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| Olawale Animashaun |

In this essay I will be discussing the development of Facebook’s business model. This essay will cover topics such as what key resources and activities are needed for the business to succeed and who can help and support the business. Once this has been established, we will then look at how it fits into the current market, what are the key benefits created from the current business and what makes the business different from its competitors. In addition, the essay will then discuss the businesses’ route to the market and how do they communicate with customers and consumers. Lastly, we will then look at who are the main consumers, breakdown of the businesses’ cost structure and how the business will be able to have great earning potential.

Firstly, the enterprise in which the essay is based on is Facebook. Facebook is an online social networking service. Facebook was founded by Mark Zuckerberg in 2004 with his college roommates and fellow Harvard University students Eduardo Saverin, Andrew McCollum, Dustin Moskovitz and Chris Hughes. At first, the website was initially for Harvard students, but they then later expanded to local universities and then eventually allowed anyone aged 13 to open a Facebook account (Phillips, 2007). Although Facebook do not have a product, they have an intangible service which they make money from.

To develop Facebook, they first needed to find out what resources they needed. Firstly, Facebook needs to be designed so users can know how to use it. To design a user-friendly website, Facebook had to hire a graphic artist (Andrew McCollum) and programmer (Dustin Moskovitz) to do so (Facebook, 2014). This then lead to the company purchasing the correct software to do so such as PHP, Linux and MySQL. The website also needs to be online so users can have access to the sight and as users are allowed to upload content, they need the storage. This requires...