Facebook – more questions than answers

IE News

IE Focus | By Dr. Ricardo Perez, Professor at IE Business School

Facebook’s decision to float the company on the stock market has revealed the true figures of this internet giant, and has left quite a few questions unanswered, particularly where advertising is concerned.At last we have some real information rather than just rumors about Facebook’s business figures. Allow me to put things into context with some of the key data. In 2011, $3,200 million in revenues and $1,000 profit. Many analysts expected to see figures over 4,000 million and say they are surprised. Some say that facebook’s revenues have not grown as fast as they should (over 80%), while others complain that net margins are also going down (still at 25%). However all have a positive opinion about the almost 4,000 million that the company has to invest in order to keep growing.

But after examining all these figures there are more questions than answers about Facebook’s future. Let’s take a look at these questions and the challenges they pose for the firm.

How scalable is the advertising business as it stands today? Growth in the advertising sector has decelerated. Adverts that appear on the right-hand side of the screen (I have just counted seven on my personal page) are not relevant in the majority of cases. Hence they are of little value from the point of view of the advertiser. In spite of the fact that they changed their policy at the end of last year, attempting to raise prices and quality, they did not get the desired results. The challenge lies in finding a better formula for using the information available to customers and convert it into a more focused form of advertising.

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First global summit for Spanish startups and international investors

IE News

IE Business School, Infoempleo and FCP Financial Communication Platforms have joined forces to organize the Spain Startup & Investor Summit on June 6 – 8 in Madrid. The overriding objective of the initiative, unique to Spain, is to make Madrid the world capital of entrepreneurship.

“Now is the time to do this. The new scenario has to mirror the talents of the powerful society that makes up Spain: entrepreneurial, reliable and competitive,” said María Benjumea, President of the initiative, during the constitution of the Spain Startup & Investor Summit Advisory Board. The Board comprises key players in the field of entrepreneurship – entrepreneurs, business leaders and institutions – who play a pivotal role in the sector. “These are people with dynamism, enthusiasm and initiative. People who are convinced that 2012 marks the turning point and that it’s time to start looking ahead,” added the organizers.

Spain, the perfect market

The Spain Startup & Investor Summit Advisory Board is the academic team behind a project that aims to bring Spain back to the world stage with the innovation, creativity and passion that are the hallmark of Spanish entrepreneurs.  The pioneering project will serve as a meeting point for international investors and these entrepreneurs.

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