Case Analysis by Group

About The Company

Facebookis an onlinesocial networking service

headquartered in California.

Facebook was launched on 4 February 2004 by Mark

Zuckerbergwith his Harvard Collegeroommates and students
.

Initially they started the website for Harvard students and

later expanded it .
Transformation of the
company
In 2004 , Facebook expanded to almost every university of US
an Canada including all IVY Colleges .
In 2004 only , Sean Parker became the president and moved to
California .
It received its first investment later that month from PayPal.
In May 2005, Accel partners invested $12.7 million in Facebook.
January 2009 , Facebook was ranked the most used social
networking service by worldwide monthly active users by
compete.com .
In 2012 , opened its first ever IPO and its share was the hot
selling in the US markets .
Contents

Information system(s) (IS) used in the case.

The relevant industry served by the IS, and how it is being

served.

Benefits of the IS for the relevant industry.

 Description of the case

History of Facebook.

Development that took place in Facebook throughout the years

Privacy concerns
Technical Advancement
Competitor Handling
Ads/Revenue

Competitors Facebook has in the social networking world

Description of the information
system used in this case

WHAT IS INFORMATION SYSTEM?

IN A SIMPLE TERMS, IT IS A SYSTEM WHICH IS COMPOSED OF
PEOPLE AND COMPUTERS THAT PROCESSES OR INTERPRETS THE
INFORMATION.
Pyramid model based on different
levels at the organization
 The information system used
in this case
Transaction processing system

Decision support system

Executive information system

 Transaction processing
system
Transaction Processing System are operational-level systems
at the bottom of the pyramid.
They are usually operated directly by shop floor workers or
front line staff, which provide the key data required to support
the management of operations.
This data is usually obtained through the AUTOMATEDor semi-
automated tracking of low-level activities and basic
transactions.
These are the examples for
which this system is used
Basic profile details
Photo share
Facebook money
Timeline
Pages
Decision support system

A Decision Support System can be seen as a knowledge based

system, used by senior managers, which facilitates the
creation of knowledge and allow its integration into the
organization.
These systems are often used to analyze existing structured
information and allow managers to project the potential
effects of their decisions into the future.
Such systems are usually interactive and are used to solve ill
structured problems.
Some of the examples

News feed algorithm

Facebook ads
Social ads
Sponsored posts
 Roles of DSS system

Support ill- structured or semi-structured decisions

Have analytical and/or modeling capacity
Used by more senior managerial levels
Are concerned with predicting the future
Are effectiveness oriented
 Executive information system

Executive Information Systems are strategic-level information

systems that are found at the top of the Pyramid.
They help executives and senior managers analyze the
environment in which the organization operates, to identify
long-term trends, and to plan appropriate courses of action.
The information in such systems is often weakly structured
and comes from both internal and external sources.
Example of EIS system

Executive Information Systems tend to be highly

individualized and are often custom made for a particular
client group
Like mobile ads and many others large specific product ads.
The roles of this system
Are concerned with ease of use
Are concerned with predicting the future
Are effectiveness oriented
Are highly flexible
Support unstructured decisions
Use internal and external data sources
Used only at the most senior management levels
 Social Media And Social Media Information Systems

SOCIAL MEDIA CAN BE DEFINED AS THE USE OF

INFORMATION TECHNOLOGY TO SUPPORT THE SHARING
OF CONTENT AMONG NETWORKS OF USES.
SOCIAL MEDIA INFORMATION SYSTEM (SMIS) CAN BE
DEFINED AS USER COMMUNITIES, SOCIAL MEDIA
SPONSORS AND SOCIAL MEDIA PROVIDERS.
 What is Social Networking ?

A social network service focuses on building online communities of

people who share interests and activities , or who are interested in
exploring the interests and activities of others.

Why Social Networking for Non-Profits?

Social Networking platforms gives nonprofits a forum for meeting like
minded organizations and potential supporters, and provide a
medium for spreading their messages beyond community.
 Facebook as an Ad
platform
Facebook offers a self-serve ad system.
They allow a high degree of targeting
Location
Education
Age/Sex/Relationship status
Language
Interests
Socials ads leverage news feed stories to amplify the
impact.
Engagement ads brings social actions directly into ad
How information systems help
Facebook as a part of social
media industry.
Facebook Ads
Sponsored Ads
Monitoring usage
Revenue Generation
 Facebook News Feeds
Privacy
What posts go to the news feeds.
Who can see the posts.
Specific inclusion & exclusion.
 Facebook Apps
 Third Party Apps Integration

Facebook For websites

 Users sign in to the third party app
News feeds go to the friends news feeds
Post goes to the users timeline
Social Gaming Industry
You play , They
earn.
Social gaming
revenue increasing
rapidly.
Facebook holds
good share in
overall revenue
almost 30-40%
How Facebook helps Social gaming ?
In may 2009 , Screen shot of page for buying facebook
Facebook introduced credits for Zynga.
Facebook credits
( virtual currency for
virtual goods ).
30% to facebook , 70%
to respective gaming
company.
In first half of 2012 ,
$1.26 billion of
revenue for facebook
through facebook
credits.
 Mobile game publisher in july 2013.
To improve visibility of small game companies.
To Promote independent games developer to post games for free.

How Gaming companies used the Information

system to increase their revenue ?
Invite or challenge your friends.
Feeds and likes from friends.
More ads/suggestions to people with gaming history.
Facebooks goodwill makes it more trust worthy for the
games to play/buy credits.
gathered about teens who are active on social networking :
 INDUSTRIES SERVED BY
FACEBOOK

INDUSTRIES SERVED BY FACEBOOK

FACEBOOK IS A CUSTOMER CONCENTRIC COMPANY AIMING AT SOCIAL
INTERACTION AND IT SERVES DIVERSIFIED INDUSTRIES THROUGH ITS PRODUCTS
AND SERVICES. SOCIAL ADVERTISING IS THE CORE INDUSTRY FACEBOOK SERVES
TO AND EARNS MOST OF ITS REVENUE FROM BUT IT ALSO SERVES MANY MORE
INDUSTRIES ALONGSIDE. SOME OF THE INDUSTRIES INCLUDE-
1)SOCIAL MEDIA INDUSTRY(FACEBOOK MESSENGER, INSTAGRAM)
2)TELECOM AND IT (WHATSAPP)
3)HEALTH INDUSTRY(FACEBOOK MOVES)
4)FINANCIAL INDUSTRY(FACEBOOK PAY)
5)ENTERTAINMENT INDUSTRY (GAMING)
 Revenue share of Facebook

Revenue Share
Others; 13%

Advertising Revenue; 87%

The IS used in the case

TPS

DSS

EIS
TPS
Basic profile details
TPS function of collecting data and representing.
Photo share
TPS function of photo sharing. Secured information.
Timeline
Timeline is updating of events which is a routine task of
TPS
Pages
Celebrity pages and Product pages general content
DSS
News feed algorithm
Checking of which news feed to appear on top.
Facebook money
Managerial decisions about money.
Facebook ads
Which ads to be placed earlier and shown repeatedly
Social ads
Decision about ads for how long they have to be put up.
Sponsored posts
Managerial decision about revenue to be charged
Mobile ads
Decision of which ads to be displayed on the mobile version.
 Facebook Messenger
1)Social Media Industry(Facebook Messenger, Instagram)
Facebook Messenger:
Facebook Messenger:
Messenger for Mobile was released on August 9, 2011 for iOS and
Android, with an October 11 update making the app available for
BlackBerry OS.
Revolution in text messaging.
Messenger for Windows Desktop was officially released on March 5,
2012 for Windows 7 users.
On April 27, 2015, Facebook introduced video calling in Facebook
Messenger app.
The role of TPS is more in this kind of an application. Here the routine
steps are performed by collecting the data and processing and sending
it to the server & from there the data is sent to the user.
This data is secure & private.
 Instagram

Instagram:
Instagram:
Instagram is an online mobile photo-sharing, video-sharing and
social networking service that enables its users to take pictures
and videos, and share them.
The service was acquired by Facebook in April 2012 for
approximately US$1billion in cash and stock.
This is also TPS where data is collected in the form of images and
videos and it is shared which is very useful for the users.
 WhatsApp

2)Telecom and IT
WhatsApp:
 WhatsApp is an instant messaging app for smartphones that operates under
a subscription business model
WhatsApp Inc., based in Mountain View, California, was acquired by
Facebook on February 19, 2014, for approximately US$16 billion.
WhatsApp uses a customized version of the open standard Extensible
Messaging and Presence Protocol (XMPP).
Upon installation, it creates a user account using one's phone number as the
username.
Its uses TPS information system.
 Facebook Moves

3)Health Industry(Facebook Moves)

Facebook moves:
Facebook has bought Moves, an app that keeps track of your daily exercise
and fitness routine as well as the places you visit.
Available for iOS and Android users, Moves is a free app that can
automatically track your walks, jogs, bike rides, and other forms of fitness.
It uses DSS information systems.
Users are able to make managerial decisions about their health, monitor their
physical activity output and manage time.
 Facebook Pay

4)Financial Industry(Facebook Pay)

Facebook Pay:
In the meantime, Facebook worked with PayPal, Braintree
and Stripe to power auto-fill of billing details for e-
commerce checkouts, and built a Buy button for making
purchases from the News Feed.
Its important to understand this feature is a partnership
with payment providers and is additive, not necessarily
competitive.
More of the payments flow is by processing payments
registered by the users.
It is a TPS Information System.
 Rockyou game developer

5)Entertainment Industry (Gaming)

 You play , They earn.
Social gaming revenue increasing rapidly.
Facebook holds good share in overall revenue almost
30-40%
How Gaming companies used the
Information system to increase their
revenue ?

Invite or challenge your friends.

Feeds and likes from friends.
More ads/suggestions to people with gaming history.
Facebooks goodwill makes it more trust worthy for the
games to play/buy credits.
It uses a DSS information system.
 BENEFITS OF INFORMATION
BENEFITS OF INFORMATION SYSTEMS
SYSTEMS
FACEBOOK
Benefits of transaction processing system:
Handling operations:
Facebook has millions of users so in Facebook, the transaction processing system helps in
handling the processing system. As at a given moment, a large amount of processes takes pace
so this system helps in handling these processes.

Security:
This system also helps in securing the information of users of Facebook from intruders.

Sharing of resources:
The information system is used for sharing of available resources and information among the
users.
 Benefits of decision support
system:
Benefits of decision support system:
Saves time:
DSS helps in reducing time for decision cycle as it provides timely information.
Also it provides the data in graphical form so it can be easily depicted and used for
decision making.
Improving efficiency:
This information system also helps in improving efficiency of decision making as it
helps in quick transfer of information and better data analysis.
Competitive Advantage:
Using DSS provides competitive advantage over other organisation due to faster
decision making. This is due to faster information transfer and graphical nature of
information.
 Benefits of Executive
information system:
Benefits of Executive information system:
Timely delivery of information:
This system helps in timely delivery of information thus keeping the users and developers
updated.
Graphical approach: -
The information shared can be easily understood as it is graphical in nature. It converts all
the textual data in graphics for easy understanding.
Improved communication:
Helps in improving the communication between the users and developers. Thus any
information can be transmitted easily and quickly.
Provides timely delivery of company summary information:
This information system helps in timely delivery of companies summary thus any decision
regarding the company can be easily taken.
 TPS(Transaction processing system)-TRACKING REGISTRATIONS AND
NET TRAFFIC;

DSS(Decision support system)-KEEPING DATABASE UPDATED WITH

PARTNER COMPANIES AND LAWS FOR A MARKET;

EIS-THE BIGGER DECISIONS LIKE IPO;ASSOCIATION WITH

GREENPEACE; THE PATENTS AND COPYRIGHTS;
 Information system adds value to the business

Organizations recruit through social media

Enterprises uses social media in many functional areas of the

business-This increases brand recognition, sales, search engine
optimization (SEO), web traffic, customer satisfaction, and revenue.

Availability of customer data and feedback help the company to

align their business processes according to the needs of the
customer.

This in turn helps Facebook to generate revenue through

advertisements.
 CONCLUSION
Information System is essential for business development.
There are many benefits that can be obtained from the
business owner by application of information systems.
To be able to keep compete with competitors every business
will require a good and reliable Information Systems.
Also information system is helpful in taking quicker decisions
thus giving an upper hand over the competitors.
It also helps in exchanging information at a faster rate so
that any change in plans can be implemented quickly.
Thus by analysing the benefits of information system in the
above four cases it can be said that to keep a better control
over the market, information system is a necessity.
Thankyou