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Why will Facebook lead the social media arena for many more years to come?

25 septembre 2016, 14:08

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Why will Facebook lead the social media arena for many more years to come?

In 2016, Facebook is already representing a considerable amount of the global internet traffic. We have different Internet usage reports and it will not be unrealistic to state that at least one of four people who use Internet today is on Facebook. According to a recent survey, 76% of the world’s female population use Facebook compared to 66% of the world’s male population (*population - eligible by age to use Facebook).

By the second quarter of 2016, Facebook has already reached a population of approximately 1.71 billion active users. Facebook has also acquired over 50 companies - Whatsapp acquisition for the sum of 19 Billion USD remains one of the costliest acquisitions made by Facebook till date (On a side note, the biggest acquisition that I know that happened in corporate history is when Vodafone took over Mannesmann for an approximate sum of 180 billion USD). Facebook strategic acquisitions have been key to their success and growth. Their Merger & Acquisition strategy is directly in line with their corporate strategy - to make the world more connected. Not later than 2015, Facebook has acquired Pebbles, which is an Israel-based startup company specialized in augmented reality and another company Oculus, in an effort to expand their virtual reality platform. The whole purpose is to better interconnect people and at the same time making Facebook more enjoyable with its ever-changing and innovative platform.

Their M&A strategy is simple - Facebook wants to lead the social media landscape for many years to come. The need to exceed expectations in the social media arena is vital to grow the active population and at the same time not to lose share of the existing population - this is where the money lies. Consider for example, Whatsapp has over 1 billion active users and Facebook will surely find a way to monetize Whatsapp more effectively in the near future, as already is the case of Instagram with approximately 500 million active users! Facebook has today the best capabilities to make businesses around the world prosper. Their analytics tools supersede the capability of any existing advertising medium to increase conversion rates (converting visitors into paying customers). They have a database of approximately 1,700,000,000 users and use powerful analytics tools to target specific audiences based on demographics (marketing based on gender, age groups, education or location) and psychographics (marketing based on attitudes, values and lifestyles). Their advertising models can perfectly target small businesses as well as large businesses.

More than ever, Facebook has set to outperform the market with its impressive annual growth rate. Facebook, with a current market capitalization of approximately 372 billion USD, will not take long to unseat other giants. According to experts, Facebook’s market value is even expected to exceed 1 trillion USD in the years to come! It is now obvious that Mark Zuckerberg (who is currently No 6 in Forbes billionaires list) will not take long to become the richest man on Earth.