Facebook Messages: Changing the Face of Online Communication?

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Case Details:

Case Code : ITSY066
Case Length : 09 Pages
Period : 2010 - 2011
Pub Date : 2011
Teaching Note :Not Available
Facebook
Industry : Information Technology; Social Media
Countries : US; Global

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction

On November 15, 2010, Facebook Inc,¹ considered by many as the most popular social networking website² (facebook.com) with its more than 500 million subscribers,³ announced the launch of a new product 'Facebook Messages'. The launch intensified competition in the free Internet e-mail market - dominated by a few global players, particularly Google,⁴ Yahoo!,⁵ and Microsoft.⁶ Facebook announced the launch of Facebook Messages as an integrated platform for online chat and text messages (from mobiles) with traditional e-mail services.

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Till then, other e-mail providers had been offering all these services as independent products and users were unable to access one service from another. Highlighting this fact during the launch of the new product, Mark Zuckerberg, CEO of Facebook, said that the traditional e-mail services no longer appealed to the younger generation of Internet users as they were too slow.

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1] Facebook, Inc, a privately held company, operates the largest social networking website, facebook.com, with more than 500 million subscribers as of the end of 2010. The company was founded in 2004 and is based in Palo Alto, California, with an operation in Hanoi, Vietnam.
2] A social networking website is an internet-based service platform, manifesting the relationship between its members, as for example students of an academic discipline, or people who share an activity/interest, or individuals who know each other and so on and so forth. These websites generally enable members to exchange/share ideas/opinions or simply to communicate in the form of instant messages, to look up a friend’s web pages, share photos and videos, and a host of other services. Members can avail of these services from a webpage dedicated to each of them – often called profile/account – which contains personal information about the individual along with web-links of other members with whom a member linked. They are different from common e-mail providers in the sense that they do not allow communicating with non-members.
3] Maggie Shiels, "Facebook Ramps Up Competition With a New Message System," www.bbc.co.uk, November 16, 2010
4] Google, Inc. is one of the most popular high-tech companies with operations in internet searching, free e-mail, cloud computing, video sharing, digital maps, a social networking site, and advertisement technologies. The flagship service of the company is its internet search technology with operates on a page-rank algorithm. The search technology is so effective that it earned the title of "Gateway of Internet" for the company. Google's free e-mail, called Gmail, had around 190 million subscribers in November 2010.
5] Yahoo! is a web portal offering a host of internet services including news, free e-mail, search engine, Yahoo! Directory, advertising, online maps, video sharing, and social media websites and services. It is reckoned to be the most visited website. Its free e-mail called Yahoo! Mail had around 270 million users at the end of 2010.
6] Microsoft, one of the first software companies in the world, develops, licenses, and supports a plethora of software products and services for a huge variety of computer devices. The most popular product of the company is the Windows Software Suite for personal computers. Its free e-mail Windows Hotmail was one of the first e-mail providers and it had around 360 million subscribers at the end of 2010, which made it the largest e-mail provider.

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