Even though it is just 6 years into business, Facebook, the world’s largest social-networking site has an awesome story to tell.
In 2005, despite having zero profit and no clear business model, Facebook gained the attention of big name investors. In 2006, Microsoft pumped in $240 million to become its sole advertising investor. The partnership lasted until January 2010 when Facebook decided to go full steam ahead with its socially powered ads.
Revenue soared as Facebook ad platform offered true value and precise targeting. Thanks to that, Facebook managed to pull off a profit late last year and is believed to be able to record a higher return this year.
Google, Facebook & Twitter
Thinking about it, there is a distinct similarity between Google (Google story video) and Facebook. Both companies focused on the product first before working towards a sustainable business model. Often, entrepreneurs are too eager to turn products into cash without realizing that product quality is essentially the key driver towards a sustainable business model.
It was just a few years back when MySpace was today’s Facebook. The product was good, but not great. Ads flooded the site and disrupted users’ experience. Soon, users had enough and moved on to Facebook, where user experience is valued and not substituted for revenue.
Twitter probably learned from history well. Its Promoted Tweets and @Earlybird are money-making initiatives, which don’t disrupt user experience. In fact, they add value to its users. It’s awesome to think back what lessons history can provide us.
The smart learned from his mistakes but the smartest learned from others’ mistakes. Interesting.
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