Can successful companies that hold a monopoly tank, or are they too big to fail? Since Facebook went public in 2012, the world has watched and waited to see if the social media giant would thrive or die. Facebook’s innovation, or lack there of, is the determinate factor in its own success. As we all know, companies that we thought were too big to fail, like MySpace, can absolutely tank, so Facebook is not above the fray. Here are the arguments for and against why Facebook’s lack of innovation could cause it to go the way of the horse and carriage.
Yes, it will tank.
1. Facebook became too big, too fast, just like MySpace. The executive COO of Facebook said it best. “Once you get too big, you stop moving” (Sheryl Sandberg). If this is true, and Facebook doesn’t change and adapt to the times, it’s possible for it to fall apart under its own weight. Especially if something better comes along that does exactly what Facebook does, which arguably hasn’t happened yet.
2. Younger people are leaving in droves, and Facebook’s stock has gone down since going public. The running joke is that the only people on Facebook are grandparents. That’s not exactly true, but it’s not a great reputation to have either. Facebook’s stock has had trouble and decreased in value since going public some years back. These are all potential signs of trouble brewing in the air.
3. Many of Facebook’s recent innovations have tanked. Facebook came out with Poke in 2012, a trend similar to Snapchat. Poke stumbled immediately upon its release. The problem, many say, is that Facebook recycles old ideas or uses competitor’s ideas instead of coming up with fresh, innovative ideas that represent its own brand.
No, it will not tank.
1. Lack of big changes is a plus, not a negative. When Friendster, another social media site, decided to redesign its entire site, it lost customers left and right. People like familiarity and stability, and they aren’t always keen on big changes. Companies take big risks when they re-do their entire brand, and there’s an argument that staying the same can be safer.
2. There’s no real competitor right now that does the exact same thing that Facebook does. Of course other competitors exist, and there’s other social media sites that are trendier than Facebook. But Twitter focuses more on sharing links and short snippets rather than connecting with friends and family. MySpace is all but dead, and Facebook bought Instagram, which is geared towards sharing photos only. Until something else comes along that has a better layout and can drive users towards it who like Facebook for what it does, Facebook is still number one in its own genre.
So will Facebook remain relevant, or will it go the way of MySpace? It’s safe to say that there’s no real way to know the answer yet to this question. Innovation in technology is vital because trends in this field are changing drastically moment by moment. If Facebook can continue to reinvent itself in a way that doesn’t drive away loyal customers, than they may be able to stay on top.
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