Describe the company Facebook.com, the products/services they offer, and the history of the
company. Next, analyze the company’s strategy, mission, and organizational structure. In your
analysis, include the information below.
What does the strategy, mission, and organizational structure say about the company?
What are the positive aspects of the strategy, mission, and organizational structure?
What are the company’s short-term and long-term goals?
What are ways to improve the strategy, mission, and organizational structure?
Much of the information you will need to complete this segment can be found in the case study.
However, you are welcome to conduct further outside research as needed. Some details, such as
the short-term and long-term goals, may not be explicitly stated. Please use your best judgement
and analytical skills to determine that information.
Your project must be a minimum of two full pages in length, not counting the title and reference
pages. Include an introduction paragraph.
Facebook, Inc., 2015
Headquartered in Menlo Park, California, Facebook is the largest social media network in the
world, with over 1.3 billion current active users of its website. Facebook ended 2014 with record
numbers: a total of 890 million users, 745 million daily active mobile users, and $3,851 million
in revenue. Facebook’s revenues from advertising totaled $3.6 billion, and $257 million in
collected payments and other fees. The company spent 29 percent of its revenue dollars on
research and development (R&D) in 2014, and spent a record $1,831 billion on purchasing new
property and equipment.
For additional assurance of learning questions which prove you understand and are able to apply
the strategic concepts in this case, go to the assignment section of your MyLab.
Facebook launched its audience network in 2014, which allowed advertisers to run their
Facebook ads on third-party mobile applications. Then in 2015, Facebook unveiled its own
mobile advertising distributor, similar to rival Twitter’s MoPub aimed at attracting more
business. CEO Mark Zukerberg spent much of early 2015 personally traveling the world, to
India, Latin America, Africa, Jakarta, and elsewhere, meeting with groups who petition their
governments for Internet access. Given that Facebook wants to grow globally, Mr. Zukerberg
describes his travels as “really cool.” He wants to aggressively help phone companies build
Internet connections globally. Only about half of Facebook’s revenues currently come from
outside the United States and Canada. Reportedly, more than 10 percent of Facebook accounts
Facebook was founded in February 2004 by Mark Zuckerberg and his Harvard
University roommates. Initially, it was to be used only by Harvard University students,
but eventually Zuckerberg and the other founders gave access to the Ivy League
universities and Stanford University. As Facebook grew popular, user access was given
to other universities, as well as Boston area high school students. Today, Facebook has
grown into a phenomenon and anyone over the age of 13 can have access to
Facebook, a social media platform loved by millions.
After launching his initial (Thefacebook.com) website, three Harvard University seniors
accused Zuckerberg of taking their idea to create a social network
called HarvardConnection.com to create a competitive product. After the three
individuals made a complaint, an investigation was initiated, and a lawsuit filed, which
was settled in 2008 for 1.2 million shares ($300 million) of Facebook’s IPO offering.
Facebook’s initial big investment was given by the co-founder of PayPal, Peter Thiel. In
2005, the company bought the domain name facebook.com for $200,000 and dropped
“the” from the original name. The investments began to grow as in 2005, as Accel
invested $12.7 million and Jim Breyer added $1 million of his own money. Facebook
has recently surpassed both Google and Amazon in percent market share and number
of users in the social media industry.
Vision and Mission
Facebook’s mission statement is “to give people the power to share and make the world more
open and connected.” Although Facebook does not have an explicit vision statement, Zuckerberg
mentions three items that reveal his desire for the company: “(1) stay connected with friends and
family, (2) discover what is going on in the world, and (3) share and express what matters to the
Code of Conduct
According to Facebook’s corporate governance report, “Facebook Personnel” are expected to act
lawfully, honestly, ethically, and in the best interests of the company while performing duties on
behalf of Facebook. The company code of conduct applies to all Facebook personnel, including
members of the board of directors (in connection with their work for Facebook), officers, and
employees of Facebook, Inc. and its corporate affiliates, as well as contingent workers (e.g.,
agency workers, contractors, and consultants) and others working on Facebook’s behalf.
Facebook has 14 subsidiaries, as follows: Facebook Benelux, Facebook Brazil, Facebook
Canada, Facebook France, Facebook Germany, Facebook India, Facebook Italy, Facebook
Korea, Facebook Norway, Facebook Portugal, Facebook Spain, Instagram, Oculus VR, and
WhatsApp. Facebook’s top executives are listed in Exhibit 1, along with an organizational chart
of the company. Note the company structure is a hybrid, being divisional by region and by
product. Some analysts suggest the structure is too complex, with overlapping duties, and would
prefer to see something similar to a strategic business unit (SBU) structure.
Facebook’s income statement is provided in Exhibit 3. Note that the firm’s net income
more than doubled in 2014. Facebook’s balance sheet is provided in Exhibit 4. Note
the company’s goodwill more than doubled, partly because Facebook in 2014 acquired
the messaging service WhatsApp for $19 billion.