Facebook addresses threat of Google, other competitors in S-1

Facebook named Google as its prime competitor among others including Microsoft and Twitter in its filing for an initial public offering today.

The Securities and Exchange Commission requires a company to describe all the risk factors associated with investing in its business before it goes public. One of these issues for Facebook is “significant competition” from companies including Google, Microsoft and Twitter. The social network notes that Google or others could use dominant positions in one market to gain an advantage in one of Facebook’s areas of operation.

With 85 percent of its revenue coming from advertising, Facebook competes with both traditional and online media businesses. Advertisers tend to have fixed budgets, and the social network will have to continue to make a case for its ads and Sponsored Stories. We have seen businesses spent significant amounts to generate Likes for their pages, but it is unclear how much advertisers will devote to Facebook once they have amassed an audience. Facebook did not address this in the document today, but it is a trend to watch.

Also critical to maintaining and expanding its position as a display ad platform is user growth and engagement. If users spend less time on Facebook in favor of other social networks or offerings, the company will be negatively affected. It mentioned Google+, along with regional networks Cyworld (Korea), Mixi (Japan), Orkut (Brazil, India) and vKontakte in Russia. The company also recognizes that other Internet or mobile companies could offer products and services that compete with individual Facebook features. It didn’t name names, but these can include everything from Apple’s iMessenger to startups like Instagram.

Facebook acknowledged that Google in particular could gain a competitive advantage by integrating its social networking platform into its existing search product, web browser or mobile operating system. On these fronts, Facebook might have to spend significantly to acquire or partner with other companies. This will be difficult, though, as many companies in the position to help Facebook fight Google are threatened by other aspects of Facebook’s business.

Creative Social Branding

Mediabistro Course

Creative Social Branding

Starting November 24, learn how to create a social buzz for your brand! You’ll learn how to engage with audiences on social platforms, identify and engage with current trends and influencers, and build an excellent social strategy to amplify your numbers and rate engagement. Register now!

 

Leave a Reply

Get the latest news in your inbox
interested in advertising with inside facebook?

Social Media Jobs
of the Day

Social Media Strategist

A Luxury Real Estate Developer
New York, NY

Newswire Editor

PR.com
New York City / Long Island, NY

Senior Social Media Brand Manager-Los Angeles Area

Brigade Marketing
Los Angeles, CA

Featured Company

Join leading companies like this one and recruit from the nation's top media job seekers on the Mediabistro Job Board. Every job post comes with our satisfaction guarantee. Learn More
 

Our Sponsors

Mediabistro A division of Prometheus Global Media home | site map | advertising/sponsorships | careers | contact us | help courses | browse jobs | freelancers | content | member benefits | reprints & permissions terms of use | privacy policy Copyright © 2014 Mediabistro Inc. call (212) 389-2000 or email us