From the Economist,
AFTER eight years, scores of lawsuits and a blockbuster movie, Facebook is going public. It is seeking to raise $5 billion from its initial public offering, which would give it an estimated market capitalisation of $80-100 billion—similar to that of fast-food chain McDonald’s. The social network employs only around 3,000 staff, giving it an average revenue of $1.2m per person in 2011. Analysts are quick to point out that the site’s users effectively act as employees, adding content and value for others. Its actual staff and private investors stand to make a small fortune from the floatation. Mark Zuckerberg, the company’s founder and CEO, owns a 28% stake, which will be worth about $28 billion. Facebook’s value is largely derived from its ability to hone adverts to the specific interests of its users. Someone who posts a lot of comments about, say, an engagement, can expect to see more ads for caterers and wedding dresses.
Facebook’s penetration level has been swiftly growing and now approaches the population of India—a manifestation of the snowballing uptake of the internet.
The company’s dynamic advertising based business model—particularly “site’s users effectively act as employees, adding content and value for others” or interactive commerce, exhibits how technology has been changing the business landscape. In the advertising arena, we are clearly witnessing a transformation from mass advertisements to custom based advertisements.
Lastly, you can see the remarkable difference of social media based business in term of employees. Technology companies (Facebook, Google, Amazon and Apple) shows how innovation can bring about the “small means big” impact/value.
Emblematic of the decentralization dynamic from technological advances, information age companies, whom caters to niche markets, have been highly specialized.
These companies provides us a clue of how organizations will be structured overtime. Also these are indications of how technology will continue to put pressure on vertical based organizations, like governments. Such organizations would need to streamline and adapt a flatter structure or go out of business.
No comments:
Post a Comment