Drumheller points out this could be averted with careful sizing and placement. “You know, those game apps… the ads are usually at the bottom, and they’re so small, you can easily ignore them. That’s the unknown, we still don’t know how intrusive these ads are going to be.”
Either way, both felt this was a move the company would inevitably have to make.
“Half of them [the users] are using mobile devices to access Facebook and missing all the ads. They’re not getting a single one,” said Gerlich. “This is the missing link for Facebook’s revenue stream because they’ve totally missed it for all these years. They haven’t gotten a nickel of all these mobile eyeballs.”
Another major weakness is that Facebook fears it could go the way of MySpace, Friendster and other social networks that have fizzled out.
“We anticipate that our active user growth rate will decline over time as the size of our active user base increases, and as we achieve higher market penetration rates…” said Facebook in its prospectus. “A number of other social networking companies that achieved early popularity have since seen their active user bases or levels of engagement decline, in some cases precipitously.”
What might be Facebook’s biggest challenge is overcoming its rival, Google. In its IPO, Facebook lists Google as a “significant competitor” and part of its “peer group”. Google makes about ten times the amount of Facebook, however most of it from advertising.
With the launch of Google+ they have positioned themselves as Facebook’s major social networking rival, but it’s undetermined whether Google will win this battle. Following Google Wave and Google Buzz, Google Plus is the third attempt by the search media giant to create a social media alternative.
When it comes to winning the war for more users, however, Google may have the advantage.
“Compared to Google, Facebook only has one aspect,” Dr. Jeffry Babb, assistant professor of Computer Information and Decision Management and associate of MediaBuffs, said. “Google has their fingers in everything. You use it to search, for Google Docs…”
In other words, the two are in the same business, but are aiming for a very different audience.
“When you go to Google you are actively searching for something, but on Facebook you’re looking for people,” said Gerlich. “When you’re on Facebook, it’s not like ‘I’ve been looking for that Beardo!’, I’m looking for people.”
Web Editor’s Note: The MediaBuffs group is currently surveying students about the Facebook timeline. If you are interested in participating, click here.