Wednesday, June 15, 2011

Facebook is losing customers : is it time for Facebook to invade China?



Facebook could files S-1 to the SEC in the end of this year or first quarter of 2012, a lot of investors are super-excited about this upcoming IPO. The IPO valuation of Facebook could be around $100 billion. Facebook is currently worth about $80 billion on secondary markets. It's set to turn in revenues surpassing $4 billion this year.
If Facebook actually through its IPO at a valuation of more than $100 billion, then its way surpasses others social network which recently went public such as LinkedIn and Groupon. Facebook value would put them as massive as Microsoft, Apple and Google.
The shocking news arise following the IPO of Facebook later this year, Facebook reported lost lots of customers, mainly in their mature market. According to Inside Facebook's data service, Facebook lost 6 million users in the U.S. last month, dropping from 155.2 million to 149.4 million. That's the first time U.S. numbers have dropped in more than a year. It also lost around 1.52 million users in Canada.
Although total of Facebook users is increase 1.7% but big drops in the countries where Facebook is become popular is cannot be good. There is indication a saturation condition to respective countries that Facebook lost their customers. A forecast by Google insight might suggest that after the decline in the first quarter, the growth of Facebook users will be steady in the second and third quarter this year and will increase at the end of this year. An indication of saturation condition in the countries such as U.S, Canada and U.K will force Facebook makes a breakthrough to maintain sustain customer growth, otherwise a valuation of more than $100billion for its IPO will be over-value for a social network company.
The question is, how Facebook increase their users significantly but also losing lots of them on the other side of the world? Given that Facebook has not been able to break into the Chinese market – the world’s largest internet market with more than 457 million Web users – taking away a very significant number of potential members, there is some speculation regarding how sustained Facebook’s popularity and growth is likely to be in the future. The only way Facebook can keep growing, then, is to add big new countries, and that country is China.
Facebook was said to be trying to break into the Chinese market through partnering with a local technology firm. The coming IPO for Facebook is the good opportunities to attract investor that have good relationships in China.
It is time for Facebook to invade China.

No comments:

Post a Comment