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Facebook Needs to Expand its Product Line Offerings. 2014.


Never let it be said that creative and forward thinking business intelligence and strategy has in any way ever diminished in importance or need. The knowledge and ability required to take seemingly abstract and unrelated ideas, garnished from various and several sources, coupled and utilized in a manner suited to derive meaning there from, make prediction based upon, and serve as the basis for the creation of a relevant, realistic, and usable stratagem based on less than provable facts will always be the greatest value added by an individual or group to an organization, company, or industry.” Joel Drotts Esq. 2014

Facebook would do well to break into the smartphone market and industry, and do so offering what I call the “Facebook Phone. “An example of such a smart phone and mobile operating platform are Droid by Google, the Microsoft Windows Phone, and of course the Apple I-Phone. Why you ask, and why now? The answers to these questions aren’t as complicated as one may believe, but only if one knows what to look for and appreciate the dynamics of the markets and position Facebook is in today.

Let’s start with financial ability and money available for Facebook to explore R& D, or to break into new industries and markets. With $20,769,000,000,000total assets, $219,000,000,000 revenue thus far this year, stocks trading at a healthy $74.83 (Double the all-time low of $38.53.), and the buying power to make purchases of one billion dollars like it did with Instagram a year or two ago, Facebook has the capital to burn. OK, no company ever truly has money to “burn, “but Facebook is definitely in an economic position where it can afford to make some rather risky moves, have those moves blow up in its face, and still keep coming like the social media juggernaut we all love to post on, to use cool terms like social media juggernaut.

Next let’s take a look at what I like to call “Market Ripeness.” In other words is the market ripe to bear fruit, should Facebook plant this seed. Jargon Nazi’s and over analysis, plug in intangibles, unknowables, intelligence, and gut instinct here. Yes, I said gut instinct, what of it. My gut tells me that if Facebook were to offer a Facebook Phone and possibly mobile operating system Facebook stock would double. Why? Well, I base that prediction upon the jumps in stock price Google, Microsoft, and Apple experienced (And Apple still experiences with each new I-Phone offering.), when they announced that they were rolling out a smart phone from their company. Moreover, all the big boys have already have gone first. Therefore, the time is ripe for Facebook to enter the mobile smart phone market as well, without having to compete with the roll out of a completely new smart phone and operating system from a fellow well moneyed technology heavy hitter. That is unless Oracle or Yahoo is planning on making the jump into smart phones. However, neither have the capital nor correct retail-social marketing base, brand, compatible technology, or reputation to dose properly.

Which brings me to yet another point, which is that Facebook has the proper retail-social, brand name, and talent to pull this off. If Facebook were to come out with a Facebook Phone with some pretty cool social capabilities, bells, and other whistles, on its own platform or highly compatible mobile computing platform, a great many people would buy one just because it is the new Facebook Phone! Plus, phones and texting, and communication or staying in touch is sort of Facebooks thing, therefore from marketing standpoint it fits and is a natural progression for Facebook to make. Can you imagine the ideas that would come about from the talent at Facebook adjust one of those famous late night “Idea Jams” they used to have, if they focused on bringing a better and new Facebook Smart Phone to market? These people thus far know what people want, or at the very least how we’d like to communicate. I’m willing to bet they could come up with something uniquely their own, and the public would eat it up. (Sorry numbers nerds, there is no measurement metric for just how profitable or valuable well-funded, happy, well compensated, well-trained, highly creative, motivated, and specifically directed mental power or forward thought process truly is. However, if you could place a number on it, Facebook would seemingly be amongst the top ranked.)

Ok… ok… I’ve sold you on the fact Facebook can or could undertake a new foray into the smartphone and mobile computing markets and industry, but you still what the “Why/”right? Why should Facebook undertake the monumental task of creating a new consumer product, in an industry it has never competed in, and break into an already competitor saturated and complex market like smart phones? Why in deed? Well, if I'm Mark Zuckerberg and I get to thinking about the future of Facebook as a company, name, and brand, then I have to begin to look at the future of the company in ever increasingly broadening and diversified terms. I’d have to start looking at and considering the future of the company in more than just social networking terms and concepts, but as a major player in the larger fields of computing and mobile telecommunications.

The reason being is because while Facebook is large and competitive, it is now indirect competition with companies that have already stopped thinking of themselves as software companies only. The companies Facebook is now in competition with are the fierce and imposing technology powerhouses like of Google, Microsoft, and Apple, and none of them thinks of themselves as only software or only a hardware company any more. Furthermore, historically speaking, the technology companies that have proven to have the longest legs of all have been those technology companies which have diversified their portfolios of consumer offerings into both hardware and software based products and services. At least the technology companies that can arguably called the new “blue-chip” publically traded technology companies (Blue-chip traditionally refers to any publically traded company considered extraordinarily safe and stable due to the fact that for a period of ten years or longer the company’s stock has only increased in value on an annual basis.).Therefore, when I say long legs, I am referring to real, sustained, and consistent profitability, value increases, and market growth.

When one looks at the history of the technology market and industry, the only companies which have enjoyed blue-chip stock styled staying power, all accomplished their amazing and long runs of sustained growth and profitability through eventually diversifying their products into some mix of both hardware and software. Furthermore, those ultra-profitable companies have done so by offering hardware products which are arguably related to their software consumer market offerings, or vice versa. The most successful of all are the technology companies have been the ones who have broken into new markets and industries by bringing to market products that enhance, feature, or compliment the goods and services those ultra-successful companies already sell.

However, despite what its competition has done, Facebook and its business model are still only serving or servicing just one industry or market. Granted it is a very dynamic market, and an industry or market which Facebook arguably single handedly created. If not created, then most definitely has single handedly wrote the book on what on-line "Social Networking" and social advertising looks like or is done. Moreover, Facebook continues to shape and determine what that industry and market looks like, and will continue to dose for the foreseeable future.

That being said, any time a large company is only in one industry the risk factors increase exponentially. The way in which the risks increase is due to the fact that conceivably the entire business and industry could or can be shut down bay few poorly drafted pieces of legislation, an unforeseen change in public sentiment about an industry, or consumer tastes just do an unexplained and complete 180 degree shift, or something like that? As a clarifying surreal example, this would be if the Surgeon General put out a report that read “Social Networking On-Line is Linked to Instant Zombification.” In an attempt to prevent people from becoming zombies, the legislature quickly passes legislation banning social networking. Granted my examples are extreme and nonsensical, but the history of technology and business has proven that the bottom can drop out on any industry on a lot less then zombies or bad legislation.

If that day ever did come, then Facebook would be in a much safer, better position, and able to survive a sudden change in market forces, if it was diversified into a second industry like smartphones by offering a Facebook Smart Phone. I know many of you are saying toy ourselves; “That could or would never happen to the social networking industry or to Facebook, because Facebook is too revolutionary... There's never been anything like it before on the planet...In fact; a recent study undertaken by Not-Real-Science Magazine has proven it to be a scientific fact that Facebook is in fact a better invention than sliced bread itself!” To those that believe as such, you may be right. Moreover, Ian fact hope you and the good folks at the imaginary but still well respected “Not-Real-Science-Magazine “is right, because I like Facebook, and I am a fan of CEO Zuckerberg (The dudes living the dream!).

However, let me ask you this question in response to your belief that the bottom could never fall out on Facebook, "Do you think Apple, Steve Jobs, or any of the now bankrupt and forgotten technology companies, their former employees, or the market analysts at the time were saying anything different then you are about the technology companies and industry that went belly up in the late 1990's and the early 2000's? That’d be a resounding absolutely not! When the first"Dot-com. bubble" burst, ten to one they were thinking exactly what Iguestomated to be the logical counter argument to the point I am trying to make, which is there is no way the bottom could ever fall out on a company as popular as Facebook or an industry revolutionary as on-line social networking. To which I counter with by simply pointing out the fact that both precedent and history would say otherwise.

By the way, the scenario I gave earlier where something does destroy the social networking market, and Facebook and its current industry are given the option to either go belly up or do a mad dash to restructure and do something else with its awesome amounts of resources, before those resources are no more. If they were in the smart phone industry they would have something to fall back on, and maybe survive by becoming the new dominate smart phone company. Some of you will undoubtedly come to believe and say, “That could never happen, and if it did switching the company’s focus to make smart phones would never work! “However, the smart and educated amongst you should be thinking to yourselves, "That scenario sounds familiar to me!"

If you know your industry and market history then the scenario I gave you will seem very familiar. The reason the aforementioned scenario may seem so familiar to some of you, is it is a slightly altered version of a well-known technology company success story. That success story being that of the late Steve Jobs, and what he did with Apple Computers after the "dot-com bubble" burst. If you’ll remember, Apple Computers was in a bad way and struggling to hold on after their computer and software divisions were hit beyond repair when the bottom dropped out on them in thatch crash or “dot-com bubble burst” of the late 1990’s and early 2000’s. And that ladies and gentlemen is the true story of why you may be reading this article on your I-Phone today.

So, to bring it all back around, from a strategic business standpoint Facebook entering into the hardware side of the market by creating and offering to consumers a Facebook Smart Phone and mobile computing operating platform system industry is not a bad idea at all. In fact, given Facebooks brand name, the amount of its resources, the age of its CEO and staff, the raw talent Facebook either has or is able to attract, the fact that Google and Microsoft and Apple (All competitors of Facebook on some level.) are already in the mobile phone industry, and as a just in case factor, are all some extraordinarily good reasons and arguments for Facebook to take a serious look at entering the smart phone market with an offering of its own. I know if I worked at Facebook at an executive level, I’d be pushing my superiors and colleagues to introduce Facebook to the smartphone industry, and to start developing the new "Facebook Phone “immediately. In closing I’d like to say to any Facebook executive whom may ever read this article, I am completely available for hire to help get this very project started, running, and completed.


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