Thursday, February 02, 2012

Facebook Talks About Its Major Competition


On Wednesday, February 1 Facebook filed its $5 billion IPO and listed its top competitors including Google, Microsoft and Twitter.

According to Facebook, the company is also competing for advertising dollars and dealing with the rise of smaller social network sites.

"We face significant competition in almost every aspect of our business from companies such as Google, Microsoft, and Twitter, which offer a variety of Internet products, services, content, and online advertising offerings, as well as from mobile companies and smaller Internet companies that offer products and services that may compete with specific Facebook features," said Facebook on Wednesday when filing with the SEC.

Facebook went on to admit that it definitely has its eye on Google’s Google+ network. "We compete broadly with Google's social networking offerings, including Google+, which it has integrated with certain... products, including search and Android," Facebook said.

Right now Google+ only has 90 million users, while Facebook has 845 million users; however, now that Google is requiring users who sign up for any kind of Google account to also create a Google+ account, the Google+ numbers will most likely spike quite a bit.

Facebook said that some of its rivals "have significantly greater resources and better competitive positions in certain markets than we do." Google could definitely fall into this category.

"Certain competitors, including Google, could use strong or dominant positions in one or more markets to gain competitive advantage against us in areas where we operate including: by integrating competing social networking platforms or features into products they control such as search engines, web browsers, or mobile device operating systems; by making acquisitions; or by making access to Facebook more difficult," Facebook said. "As a result, our competitors may acquire and engage users at the expense of the growth or engagement of our user base, which may negatively affect our business and financial results."

Facebook is also on the lookout for smaller social networks that could pose potential threats. Some of the networks that Facebook is watching out for include Korea’s Cyworld, Japan’s Mixi, Brazil and India’s Google-owned Orkut and Russia’s vKontakte. "As other companies introduce new products and services, we may become subject to additional competition," the company said.

So far Facebook has not really detailed the competitive pressure that it feels from companies like Twitter and Microsoft; however, they have said, "We…face competition from traditional and online media businesses for a share of advertisers' budgets and in the development of the tools and systems for managing and optimizing advertising campaigns."

Source: PCMag - Facebook Names Google, Twitter, Microsoft as Major Rivals


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