This case study details product strategy for facebook on significantly increasing user base and ways to monetize the features. Includes complete feature strategy, feature mockups and financial models.

1. Independent study project FEB 2010
Mone%za%on strategies for facebook*
Vivek Narayanan
Management student at the Indian School of Business, Hyderabad India
* Disclaimer: All views expressed are my personal opinions only and does not relate to facebook in any way. Any
reference to facebook or its employees are only for humor and to preserve the spirit of a case study.

2.  Introduc%on
 The CEO Idea Book
 Blog
 Ques%ons?

3.  Introduc%on
 The CEO Idea Book
 Blog
 Ques%ons?

4. Dense connec%vity
• Average user has 130 friends
• Average user sends 8 friend
requests per month
• Over 65 million ac%ve users with
mobile access
Ac%ve user
par%cipa%on
• 350 million ac%ve users
• 175 million users logon daily
• Average user spends 55 minutes
daily
Rich and extensive
informa%on
Links, photos, events, personal
informa%on
Source: hWp://www.facebook.com/press/info.php?sta%s%cs

5. The trend has been outward
looking towards partnerships facebook
Credit
facebook Move away from
Connect easily replicable
features
facebook
Applica%ons
Identify unfulfilled
needs that can be
solved uniquely by the
social networking
community
facebook
mySearch
Leverage the
amazing number
of active users facebook
and connections reUnite
facebook It is now time to look inward
Surveys

6. Decentraliza%on User
contributed
value
Co‐crea%on
Mone%za%on
Experience
Differen%a%on AWributes The long
tail effect
Founda%on
Remixability AWributes
Emergent systems Network effect
Source: Experience AWributes: Crucial DNA of Web 2.0 by Brandon Schauer

7.  Introduc%on
 The CEO Idea Book
 Blog
 Conclusion

9. What Why Text
How Features Mone%za%on
It may not tell you the “Answer to the Ul%mate Ques%on of Life, the Universe, and
Everything” but it can tell you “The best dry‐cleaner for your all‐important towel”
 Inspired by the latest in ‘Social Search’ technology
 Leverage networks of like‐minded users (groups, friends) to provide real‐
%me answers to common daily ques%ons
I am looking for a restaurant
with a quiet ambience . . .
What is a scenic route to
drive from Chennai to
Pondicherry?
 The concept works!
 Small number of concepts launched; Aardvark, Google Labs and socialsearch
 Aardvark claims about 90% ques%ons answered within 5 minutes
 Aardvark has about 250k unique visitors each month and many more ac%ve users

10. What How Features Mone%za%on
It may not tell you the “Answer to the Ul%mate Ques%on of Life, the Universe, and
Everything” but it can tell you “The best dry‐cleaner for your all‐important towel”
 Hard to get immediate gra%fica%on for Average search user “ I am
simple daily ques%ons never going to find the answer
 Blogs, great source but with shortcomings in a million blogs!! “
 Sta%c content from WebPages might not be
up to date
 Hard to find context‐specific answers
 Near‐instant answers
Average blogger “ I am not  Highly efficient informa%on sharing
sure if someone even needs
this stuff!! ”  Reliable up‐to‐date informa%on
 Content dynamic and evolving in nature

11. What Why How Features Mone%za%on
It may not tell you the “Answer to the Ul%mate Ques%on of Life, the Universe, and
Everything” but it can tell you “The best dry‐cleaner for your all‐important towel”
 Leverage friends and groups in your network for posing your ques%ons
 Users enter topics of interests that they would like to answer ques%ons on
 Ask/answer ques%ons via facebook chat, popular IMs and mobile phone
 Chat‐like interface moderated by a “FB bot” to provide a real‐%me experience
 Mine for addi%onal interests based on user profiles to slowly involve more users
Sophis%cated network algorithms to iden%fy the right people to pose the ques%ons
 Based on how onen they have been contacted
 Past answering paWerns
 Time of the day and frequency preferences

12. What Why How Mone%za%on
It may not tell you the “Answer to the Ul%mate Ques%on of Life, the Universe, and
Everything” but it can tell you “The best dry‐cleaner for your all‐important towel”
 Ability to control how onen ques%ons are asked
 Modes of contact – SMS, IM, facebook chat, twiWer etc..
 Increase the scope of ques%ons answered by users by analyzing data paWerns
 Display ques%ons asked by the users on the profile page as an op%on
 Show a graphical tree showing how the ques%ons travel through one’s network
 Restrict the ini%al response to 300 words with no limit on subsequent responses
 Simulate user interest by pos%ng “Conversa%ons of the day” on all FB user pages
 Users have the ability to rate answers

13. What Why How Features
What is a good Italian
restaurant in Vasant Vihar How can I surprise my girlfriend
in Delhi? on Valentine’s day?
 Overall adver%sing revenues in the US in Jan‐Jun 2009 in the US was $11bn
 Search contributed to 47% of online ad revenues
Time dimension adds value to advertisers: “What does the user need now? ”
 Reviews added from public sites like Yelp, Yahoo, Google or from friends
 Adver%sers can control ad displays based on keywords and user profiles
 Analy%cs data provides user demographics and future context specific recurrence
of the adver%ser’s name
 Local businesses contributed to 74% of FB’s ad revenue
 Users have the op%on of adding facebook Credits to improve the response rate

14. Next

15. Back

16. Back
*PriceWaterCoopers Report

17. Back

18. What Why Text
How Features Mone%za%on
We cannot change her mind yet , but we can connect you with your high school sweetheart!!
The last I heard of him was that he
It would be great to plan a reunion of my was working for Lowe’s but he never
high school friends, but gosh all their was regular with emails or social
emails might not be up-to-date and many networking…
might not even be facebook!!
 Reunite helps people organize reunion events with a specific focus on
increasing aWendance
 Unique value proposi%on to find people who might not be ac%ve on
facebook or even on the internet
 Finally new users are required to register on facebook to par%cipate on
reUnite

19. What How Features Mone%za%on
We cannot change her mind yet , but we can connect you with your high school sweetheart!!
 Capitalize on the over 100% increase in the 25 yrs+ segment and build it further
 Inspired by the red balloon challenge that was solved in less than 9 hours
 Concept can be extended to promote events and invite people proac%vely based
on their connec%ons
 Addi%onal stream to further increase user base
But is there enough demand?*
It made it very cheap for us to connect quickly with classmates and get
information out to them. It was also easy to get feedback on what dates
students prefer and, afterwards, on how the event went. I think that five
years from now, the popularity of Facebook is going to make it an even
more effective way to get people together.” – Class officer Lowell High
School, SFO Final attendance was 214/600 classmates
*How Facebook Is Affecting School Reunion – TIME magazine Jun 15, 2009

20. Back

21. What Why How Features Mone%za%on
We cannot change her mind yet , but we can connect you with your high school sweetheart!!
 Leverage the extensive network of friend connec%ons to find people; similar to
friend sugges%ons
 Analyze trends to iden%fy poten%al connec%ons outside of facebook/internet
 Make use of real life networking that can happen through work, clubs, locality
etc..
 Op%on to use publicly available informa%on from other social networks

22. What Why How Mone%za%on
We cannot change her mind yet , but we can connect you with your high school sweetheart!!
 Minimum of 5% of the class needs to signup to place a request for a reunion
 reUnite only needs to know the ins%tu%on name and gradua%on year
 Users can specify how long and how onen to reach out to contacts
 There will be a University op%on (premium) for Ins%tu%ons
 Supplemental tools like calendar, loca%on chooser, event management tools etc..
 “No%ce board” for aWendees to discuss old jokes, remember nick names etc..
 Opt‐out op%on for users who do not want to receive reUnite related queries

23. What Why How Features
We cannot change her mind yet , but we can connect you with your high school sweetheart!!
 Premium service for Ins%tu%ons like Universi%es or schools to tap donors through
reunions
 ‘Comparison calculator’ details the savings as compared to mailing out invites and
also the poten%al gain of increased aWendance
 Universi%es can input the en%re roll call of the corresponding batch to maximize
hit rate
 reUnite extends the search to external social networks and publicly available
informa%on
 Targeted ads to be served around the theme of providing event management
services
 Profitable demographic of successful people looking forward to a memorable and
nostalgic event

24. Back

25. Back

26. What Why Text
How Mone%za%on
 Plavorm for companies to reach out to users for surveys
 Surveys can range from brand awareness, posi%oning and other market
research purposes
 Purely a commercial ini%a%ve with monetary incen%viza%on
 Specifically useful for SMEs to conduct inexpensive and effect research
A New restaurant in South
Bombay can proactively identify
Sample demographic “Male, consumer tastes before its
college educated in the launch
greater Delhi region under 30
yrs of age”
Volkswagen wants to conduct a country wide awareness campaign
for the new Beetle launch . . .

27. What Text
How Mone%za%on
 Rela%vely inexpensive way to reach out to very targeted demographic segments
 Companies can dynamically increase or decrease the size of the target segment
 Very aWrac%ve for SMEs to understand their local markets
 Target young college crowd who would not mind making extra money on the side
 Unofficial facebook surveys are already popular amongst users with sites such as
facebooksurveys.com
 Companies can also test out poten%al target segments for star%ng viral marke%ng
campaigns

28. What Why Text Mone%za%on
 The service is a purely opt‐in service
 Company specifies its demographics preference for survey targets
 Company also specifies the monetary incen%ve per user
 facebook iden%fies relevant users who have opted in
 Ads for facebook surveys are presented to friends of users who have opted in
 Intelligence is built in to carefully target users with poten%ally similar interests to
avoid annoyance
 facebook also presents broad guidelines for survey lengths and complexity

29. What Why Text
How
 High return, High risk venture to be started in a phased manner
 Evolve model gradually to include tiered pricing and add more survey
options
 High Dollar-Credits ratio provides a feeling of inflated rewards to users

30.  Introduc%on
 The CEO Idea Book
 Blog
 Ques%ons?

31. Introducing our latest feature – mySearch
Do we need another search engine? Isn’t search one of Internet’s oldest innovation! Are we now trying to catch up with
Google!! All these are genuine questions that might arise, but we are just go out on a limb on that last one and say “Well,
yes!!”
mySearch is built on the upcoming technology called “social search”. It is amazing how inefficient the current search
technique is and yet we do not actually even realize it. Current search works great for information that is “bookish” in
nature. Like stuff that you would want to look up in an encyclopedia. How often are we after such pedantic pursuits? I am
mostly just looking for common daily questions like:
What is a different date idea to surprise my girlfriend for Valentine’s day?
Where is a good eco-friendly dry cleaner in my neighborhood?
The problem with finding answers for such questions is that they are usually too trivial for someone to put it up on the
web. Blogs are usually a great place, but apart from the super-creative literary types at work (that might be an
exaggeration), how many people do you know blog? mySearch is our answer to this problem. Using sophisticated social
graph analysis and artificial intelligence we identify real people in your extended network who might actually know the
answer to your question. It might sound like we created a supersonic rocket to get around your neighborhood, because
after all we are just saying we are asking your friends for the answer . But my engineering team assures me that it is
nothing short of rocket science!!
Using mySearch is very simple. There are a few settings that you need to get out of the way before jumping right in. These
are pretty basic stuff asking you to name a few interests that you might want to answer when someone in your extended
network asks you. Then comes a few settings to figure out how to reach you and when to reach you or more importantly
when not to reach you for questions. After that you can dive right in and start asking questions.
For effective results, you must only ask questions that are experiential in nature. Huh! That is like saying drive at 30 mph
in that red thing you call a Ferrari. Having built this monster, we are of course not going to stop you, but just be advised
that if you are questions are hard to answer then you might not get an answer quickly or even not get one at all! This
should not happen often enough though, in our closed beta tests our users got answers to their questions 90% of the
times and that too within 5 minutes!!!
You guys must be familiar with the facebook Credits feature launched last week. Well mySearch will be our first feature
fully supporting Credits. You have the option of offering preset credit amounts (10,25,50) to your questions. For such
questions, you should rate atleast one of answers and the the one with the highest rating wins the credit.
‘Nuf said.. Go on play around with it and let me and crew know how you are liking it.

32.  Introduc%on
 The CEO Idea Book
 Blog
 Ques%ons