Facebook SWOT Analysis 2024: Here’s Why FB Is Dying!

Facebook is the world’s 9th most valuable business and the world’s 1st social media platform by market cap. The platform can be hailed as the predecessor to modern social media platforms. But it’s currently facing reputation and revenue loss, and we will reveal the reasons through the Facebook SWOT analysis.

Facebook: Company Overview

On February 4, 2004, Mark Zuckerberg, Chris Hughes, Dustin Moskovitz, and Eduardo Saverinand launched Facebook for Harvard students, then for Yale, Columbia, and Stanford in March. In June, Zuckerberg left Harvard to work on Facebook, and PayPal co-founder Peter Thiel invested $500,000. Facebook started collecting user data on other sites through its Beacon ad program in 2007, starting a long chain of controversies that have lasted to date.

Facebook is now a social media platform with a $479.37 billion market cap. The platform’s headquarters is at Menlo Park, California, and it employed a staff of 86,482 large in 2022. The social media site made a TTM revenue of $116.60 billion in the same year.

Product & Services of Facebook
Social Networking Platform | Stories | News Feed | Marketplace | Watch | Messenger | Instagram | WhatsApp

Facebook Competitors
Twitter | Snapchat | Pinterest | LinkedIn | WeChat | TikTok | YouTube

Did You Know?

Zuckerberg named the initial version of his site Facemash and hacked into Harvard’s database in 2003 to collect personal information for it. He then allowed users to rate female students on the site based on their “hotness”.

Strengths – Facebook SWOT Analysis

Most Used Social Media: Facebook is the world’s most used social media platform, with over 2.96 billion monthly active users in 2022 Q4. The platform reached 2 billion active users by 2017, an achievement 13 years in the making. Many virtual platforms have become stuck within the western hemisphere, but Facebook has truly managed to dominate in almost every international market. Its largest user base resides in India, with over 330 million large and growing, and it’s also growing in leaps and bounds in Indonesia and Brazil.

Targeting Female Users: In 2021, female users spent roughly an hour and 3 minutes per day browsing social media and currently make up 61.8% of Facebook Marketplace visitors. 72% of adult women use social media worldwide, compared to 66% of adult men. Facebook has managed to draw the more active gender on social media to its platform, as women across all age groups use it around 1.3% more than men. Considering the average US Facebook user spends 33 minutes on the platform daily, attracting women drives more traffic to Facebook and generates more user data.

Strong Advertisement Platform: Facebook had over 10 million active advertisers in 2020 Q3, and the platform generated $84.2 billion from this sector. It manages to earn over 92% of its ad revenue from mobile users, who generated over $50.6 billion in 2018. Facebook’s advertisement market is huge, with 66% of its user base logging in to actively find new products or services. 52% of its user base’s online and offline purchases are influenced by Facebook ads, which makes Facebook a powerful medium for marketing SMEs.

Predicting User Behavior: The main reason behind Facebook’s success as a social media platform is its ability to predict user demand and serve content accordingly. Facebook uses its machine learning algorithm dubbed FBLearner Flow, which can be used on different products and scaled to run as many operations as needed. In 2016, FBLearner Flow was being used by 25% of the engineering team, making more than 6 million user behavior predictions per second. To achieve this, Facebook collects billions of user data points and processes them to understand what product or content you’re most likely to interact with.

Large Virtual Marketplace: Facebook launched a “Marketplace” within the platform in 2016, introducing an official method of trading goods to 450 million users already active in buy and sell groups. In 2020, Facebook also introduced the “Shop” feature, which allowed SMEs in particular, to find a virtual platform for conducting business. In 2021, Facebook had 1 billion users visiting the Marketplace and 250 million users visiting 1 million shops per month. After releasing the Shop feature, Facebook’s average per-user revenue rose to $32.03 in 2020, compared to $6.8 in 2013.

Weaknesses – Facebook SWOT Analysis

Questionable Reputation: From 2012 to 2022, Facebook has seen a near-consistent drop in its reputation, from being ranked above 50 down to being 97th in 2022 in the Axios Harris Poll. The platform has been hated by its users for serving misinformation, pushing mindless content, enforcing policies that are ineffective, but problematic, restricting users without reason, mishandling personal data, and many more reasons. Some attempt to argue that Facebook’s design philosophy is the true cause for these issues, but the platform has been vilified by the public for failing in ethics, trust, and culture.

Spreading Misinformation: From spreading conspiracy theories and pseudoscientific concepts to inciting genocides and riots, Facebook has been found guilty of spreading misinformation to the masses and causing chaos many times. The platform has been proven to create polarizing opinions in its users, and it preaches propaganda and uninformed opinions to users to please whoever is in power. Even after being criticized by users time after time, Facebook saw a 177% increase in published misinformation. This is caused by major news media such as Fox News and Daily Wire, which rely on sensationalist, opinionated, and politically charged articles to gain attention.

Data Hoarding: Facebook’s business model depends on harvesting user data and selling it as a product. Its business practices have led to over 87 million users’ data being stolen and used by Cambridge Analytica, and it is only 1 of many instances. Facebook has nearly unrestricted access to users’ phone data, and in 2019 it used its accesses to snoop on children and teens. Facebook even tracks its users’ data on other sites and devices through tracker cookies. The social media platform keeps your data even after users leave, causing many users to abandon the platform.

Lacking Security: Since its creation, Facebook has been plagued with security breaches and data leaks. In 2013, a bug in the platform left 6 million users’ data exposed. And in 2021, 533 million users’ data were scraped off by a hacker called Tom Liner, which contained personal numbers, addresses, locations, email addresses, and birth dates. Facebook responded that the data breach was old and outdated, but accidentally admitted that it was intending to normalize the issue. The platform’s unwilling admission, casual dismissal, and attempts to trivialize its failure have not inspired confidence in its user base.

Opportunities – Facebook SWOT Analysis

Bolstering The Marketplace: Facebook can continue improving its Marketplace and Shops features and make its platform more appealing to SMEs. The platform can be updated to make custom orders, show real-time inventory, call auctions, and upcoming market products. It can entice many users away from platforms such as Craigslist and Etsy and charge for transactions and listings.

Offering Facebook Sign-up Bonuses In Games: Facebook can contract popular game publishers to allow players to log in with Facebook. If it offers players rewards for the log-in, it can access the player data with consent and use the obtained data without repercussions.

Redesigning Streaming Services: With Twitch banning its streamers left and right without rhyme or reason, Facebook can pick up the slack and restructure its streaming services, providing room for using more free speech and profanity and offering better sponsorships and revenue.

Threats – Facebook SWOT Analysis

Tracker Blocking Services: Many organizations have launched services such as browser extensions that block Facebook’s trackers from collecting user data. Mozilla Firefox comes with an in-built Facebook Container extension, and other developers, such as Privacy Badger, offer stricter blocking abilities that completely remove chances of data collection. If most users start using these services, Facebook will no longer be able to optimize its ads.

Government Crackdown: Since the Cambridge Analytica fiasco, most governments have been in a mad dash to control Facebook’s operations. In 2017, Facebook was fined $122 million by the EU for providing misinformation regarding the WhatsApp acquisition. By 2018 the U.S. government was attempting to control Facebook’s activity, and Biden addressed Facebook’s misinformation spreading in 2020. Eventually, the government could forcibly restrict or break Facebook apart.

Unplanned Expansion: Facebook has been attempting to expand through Metaverse, but it has already been predicted to fail. Facebook’s streaming services have also been dubbed the worst of the bunch, and all these expenses could potentially squander Facebook’s revenue without any ROI.

[Bonus Infographic] SWOT Analysis of Facebook

Recommendations for Facebook

If Facebook wants to sustain its business, it should consider these options.

• Facebook should be more transparent about data collection.
• It should strengthen its data security.
• It should not snoop on users’ online activity.
• The platform should introduce more Marketplace features.
• Facebook should gradually move away from ads to other revenue streams.

Frequently Asked Questions (FAQs)

Final Words on Facebook SWOT Analysis

Facebook is on the brink of losing its revenue stream and has already lost its company reputation. To save itself, the platform must reinvent its site structure and change its revenue streams. Otherwise, it will be lost through lawsuits, public outrage, and financial failure.

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