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Take a stab at one or two of these questions:
What does the future hold for these two giants? Predict and speculate.
Should they shift or expand their business model(s) and/or focus?
Which would you invest in if you had the resources?
What are the risks of depending on an advertising for your source of revenue?
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send: Saturday, January 24, 2009
Facebook vs. You Tube
Labels: business model, facebook, future, speculate, youtube
Posted by Scott at 12:05 PM
13 comments:
I predict Facebook and Youtube to both have very prosperous futures. We have already watched facebook grow extensively in the past few years. What started as a social network for college students has developed into a social network for all ages, both young and old. I see Facebook soon becoming popular on a more professional level such as linkdeln. Maybe a way for internal interaction between employees within a company.
Youtube has created an extremely loyal customer base due to its user friendly interface. I believe Youtube will soon acquire, through a buyout, companies that allow for people to watch television and movies over the internet.
If I was to invest in one of these companies I would choose Facebook. This is because Facebook has access to some of the most desirable marking information and can generate significant revenue from this knowledge. With this highly desirable audience very accessible through this social medium there is sure to be more growth and revenue possibilities. Additionally Facebook has many areas that it can expand to maintain and continue its user growth. By allowing users to communicate as well as share photos and videos the user is already drawn to the site for several services. In the future Facebook could develop a professional side that may be geared towards businesses to network and develop a whole new market interest. Overall the possibilities to sustain its self and expand are my main reasons for choosing to invest in Facebook over Youtube if given the choice.
At this point in time I find myself to be very frustrated with the state of facebook. Facebook has undoubtedly lost its overall appeal in the last few years. Through opening up the website to just about anyway, facebook has broken out of it niche market and rapidly expanded. Is this a bad thing? Perhaps not, however their current infrastructure does not seem to support such rapid and aggressive expansion. Albeit I am currently bitter that I can not log into my account without reaching the 'system maintenance' page, I do believe facebook will be fine. With the insurmountable number of participants on the social networking giant and their ability to effectively use advertising, I do not see an obvious program in their future.
Similarly, youtube has also revolutionized the industry and provided individuals with a 'cost-effective' way to spread their names. Youtube uses a wide array of advertisements to entice potential customers and is able keep their users happy.
For both of these businesses, I firmly believe that they need to stay focused and invest in their infrastructure. As previously stated, facebook maintains a slow and spotty website, that must change. In order to remain competitive, your product must be far surperior to your competition. With the rise of the more professional site 'LinkedIn,' facebook has a lot to think about. In the end facebook may want to revamp its current focus and concentrate less on campus gossip and more on professionalism.
In regard to youtube, I believe that the site maintains very respectable operations and there is not much that needs to be done for their business model. The only concept that I could come up with, for additional revenue, would be to have a pay-as-you-watch section on this site. The average person does not have time to go out and rent a move or even the 'dedication' and yes I said it, dedication, to sign up for a monthly membership to netflix. By possibly adding movies and tv shows as premium on youtube, the site would be able to generate more hits, revenue from movies/tv shows and ad dollars.
Currently, I would invest in both of these business. Both have been able to dominate their respective markets and wipe out potential competition. Be that as it may, it is also somewhat risky to invest in both of these companies because advertisements can be pulled at any moment, which would entail the devaluation of your investment. As long as facebook and youtube remain dominant and well-respected, I do not sense this will happen.
I feel that as time continues Facebook and YouTube will have to combine forces. The Internet is a funny place, websites that were once popular either fade out or go to Asia.
Users will want a one-stop location to put all their videos and chat with friends.
I would personally invest in Facebook. The sole reason is that the information that Facebook owns about each individual on its site is worth lots of money. YouTube has only one real revenue source, and that's through advertisements.
The only way I think that YouTube can make some bucks is by initiating a fee to upload a video but they would lose many individuals.
While both companies have had promising starts, I believe neither of them have a guaranteed future. I believe Facebook needs to expand their business to be more than a social networking site. They have toyed with other options - classifieds, widgets, and random things, but they could reinvent themselves as so many things that could not only leverage the marketing information they have, but utilize their diverse and loyal customer base.
I see YouTube as a less promising site. I feel that their customers aren't as loyal and can go to other places for the things they need. On the hand, they have so much content it is difficult to recreate such a website in an short amount of time. Similar to Facebook, if they could leverage their content and customers better, they could be an even more dominant web company with better revenue streams.
The business concept for Facebook and Youtube is promising, considering the boom in Internet use. Everyone is online. From broadband devices to PDAs, we are at the forefront of a technological revolution. No matter what perspective you?re taking, these giants will continue to expand because of the high demand for instant communication, entertainment and desire to be the first to see what's hot. Because these two companies were brought on board for social networking, online streaming, and freedom of expression, they have become a lifeline for media information and opportunity.
Facebook began targeting just the college demographic and now it has expanded its market to essentially everyone who wants to socialize. It has lost the intimacy that presents social networks its authenticity. For advertisers who capitalize on the FB market, there's guaranteed competition. Companies, products and services are abundant, and it may be very overwhelming for people whom solely join Facebook to connect, not to be annoyed by pop-up advertisements. Furthermore, there are other competitors that specifically cater to business networks such as Linkedin. The more Facebook continues to offer more services, it will lose its value.
If I were to invest in one of the two companies, I would certainly choose Facebook. Although YouTube has acquired such a strong name/brand for itself over the last few years, Facebook has grown in the amount of users, markets, and number of applications to an enormous extent. Facebook first surfaced on the college scene my freshman year, now as a senior I look back at all of the different applications that have been installed and how fast users become attached to them. For example, I can remember when they started the Facebook chat application, I thought to myself “ no one will use this, its simply a copy of aim which everyone uses already”. Now, only a short time after the application has been installed, I hardly go on aim and see myself and so many other people using Facebook chat over aim. I look forward to see how Facebook will take over other means of communication and what other applications they will apply. I can compare Facebook with apple’s applications, they seem to keep inventing new ideas for applications that as a consumer, I never even realized I would use.
While I do support facebook and youtube, I am not sure how much more room there is to grow. Besides a few sponsors and ads, I do not see a lot of revenue drivers that will support additional growth. It will be interesting to see what these management teams do in order maintain profitability.
Open ID is going to be huge for Facebook. If they position themselves right they can win that war which would put them as the one site/platform that everyone in the world needs to use. In essence, I think they have been doing a great job at that since most have a Facebook account already. But like everyone else in the tech world they are going to have to battle Google who just happens to have the creator of Open ID working for them. And like J.Charles said Facebook has had a lot of downtime with the rapid expansion. To be honest, I have never seen Google down.
YouTube is a funky thing these days. I feel like it's lost popularity but still is looked at as the most reliable source if you want to see something like Obama's inauguration dance. I think they should start being more selective with the videos they allow and make it a more serious site. Make their slogan "YouTube, the videos you need to see"
As an individual I use both Facebook and Youtube, and I think that these sites will continue to be popular, into the future. Their business models seem sound and I don't see them expanding or shifting their focus, unless Youtube decided to split into separate linked sites geared towards different groups/demographics. The risks inherent in their business model are those of depending on advertising. With the variety of media available for advertising and the specific users of sites such as these, it makes it easier to see if the advertising is not effective, further in hard economic times one of the first items that can be reduced is the money spent on advertising, which in turn would impact sites like Facebook and Youtube. If I had money to invest I would probably invest in Youtube, I believe it has a very promising future and the possibility of expansion and diversification. Recently as a user I have not been as pleased with Facebook, it is frequently not accessible. I think that the site will not die out as people our age will retain their accounts to keep in contact with past friends from college and highschool but I also don't see myself actually using it in the future, except to look up what city a friend is living in now. The problems that I have been experiencing with it would definitely keep me from investing in Facebook for the long run.
Which would you invest in if you had the resources?
What are the risks of depending on an advertising for your source of revenue?
Facebook still has a lot of unseen potential that Mark Zuckerberg has yet tapped into. However, Facebook is a social networking site so I think there is a limit in terms of what they can try to do with the application. There is no question that the amount of users for Facebook will continue to grow, however Mark needs a business plan at some point. They do not have a specific self sustaining formula for income drivers other than advertising, basically. Youtube, on the other hand, has a more defined business plan that can keep them self-sustaining. The sky is the limit for what the two entities can do with their site outside of its general concept. It's a matter of time for Youtube and a matter of Mark Zuckerberg growing up for Facebook (from a business standpoint).
I would choose to invest in Facebook because Youtube seems to be more 'grown up' already and Facebook has much more room to grow. And you always want to invest in a company right before it becomes huge. I also feel the people who are on facebook make the most of the application whereas people on Youtube either go on only to watch one or two videos and don't have an bother to sign up for an account. Facebook's users spend more time on the site using everything it has to offer and log on much more often.
Self-sustainability is an issue when talking about depending solely on advertising. Facebook and Youtube will continue getting more and more users and hits, but they, especially Facebook, needs to figure out another strong revenue driver that will to take it to that next level of dominance. For example, Facebook has a feature where you can send a virtual 'gift'(basically an icon) to your friend for about a dollar. However, I don't see this being an additional killer source of income.
If I had the resources I would certainly invest in facebook. I think that both have great business models and focuses however I simply think that the ease of use of facebook will draw in more users compared to that of YouTube. The fact that all users do not have to be familiar with how to use video capabilities and also can connect with other users in a what seems to be more simplistic user interface gives the current edge to facebook. I also think that facebook has the potential for more revenue drivers compared to that of YouTube due to specific content visited and diagnostic profile measures which advertisers can use to get to specific potentially interested consumers.
I think that the future holds a few different things for both facebook and YouTube. I think that there will be similar networks established and altogether side projects that both entities will get involved in to offer there own academic and professional services whether be it in branches of their currently existing websites or new sites altogether. From this, I envision both companies trying to break out of a model which depends on only advertising for the sole source of revenue. These companies will start charging professional users to use their networks and websites. I wouldn't be surprised if facebook were to get into internet dating either. The future should be interesting for both companies.
It's hard to say which company I would invest in if I had the necessary resources. I don't agree with the older and younger demographics accessing Facebook and I think YouTube is going to continue to grow into a success however more and more people are joining Facebook and logging on to be networked to people from their past and the future so it really is a toss up on which site I would invest in...
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