This essay investigates the likelihood of Facebook keeping its superstar status by 2020. Using a Political, Economic, Social, Technological and Legal (PESTL) analytical structure supported by a brief examination of the valuation methods used by Facebook for the Initial Public Offering (IPO) as well as a Five Forces assessment the question will be broken fully into elemental parts to reach a conclusion. The key issues discussed in this report are the effects of the highly speculative valuation of the company before and during its IPO regarding its future; the political forces responsible for on-line privacy, data exchange controls and breach of confidence laws; barriers to entry to China and the world’s general current economic situation. Lastly the motives and cultural differences of Facebook users, opportunities shaped by the 4G mobile technology, the ability of users to influence Facebook strategic management, the entry of a new market player, the bargaining power of advertisers, threat of substitute and the rivalry between Facebook and Google are also discussed. [Read more…]
