Can “Facebook At Work” Create A New Revenue Stream For The Company?
Recently, Facebook‘s (NASDAQ:FB) enterprise social network for businesses known as “Facebook at work” was launched in India, expanding its reach globally. The platform, which is currently in beta mode, is being used by 450 companies globally (including 15 Indian companies) and around 60,000 companies are in queue to join this network. “Facebook at Work” is similar to the company’s social networking platform, featuring profiles, news feed, groups and messages. Two different companies on the platform can connect to each other seamlessly. While the official launch of this platform is a few months away, Facebook is testing the product in various geographies and has seen the fastest adoption rate in India. While most companies have their own websites to manage employee communication, the familiarity of Facebook can work in its favor, given its large user base. Developed as a ‘mobile first’ solution, the platform if offered with unique features. It has the potential to grow significantly and become an important revenue stream for the company in future.
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Popularity, Mobile Based Solution, Emerging Markets Key Growth Drivers
While most companies have their own internal systems and websites for employee communication, Facebook’s strategy to develop its @Work platform as a mobile first solution can work in its advantage. The ability to access corporate information on mobile devices — now the most common way of accessing information on a platform — holds great promise. As such, the patform can appeal to both employees and employers. Facebook’s large user base of over 1.5 billion users ensures that the training requirement for employees to use the @work platform will be minimal. The platform can reduce stress on the corporate intranet as companies use it for announcements, issuing circulars and employee chats. For small and medium enterprises which do not have an existing platform to communicate with employees, this ‘ready-made’ solution can prove to be extremely useful, leading to higher adoption. In emerging markets such as India, where all corporations might not have invested in technology for employee communication, Facebook@ Work is seeing higher adoption rates. Wesuspect that this platform can capture a large market.
While Facebook does not monetize a solution till it reaches a critical mass of users, it is offering a free version of Facebook@ Work and companies can pay extra for certain features. Since advertising might not be an option on this platform, Facebook will need to work on a mechanism to charge companies to monetize this product. Attractive features which encourage corporates to pay a price for them will be critical to drive revenues from this platform. Facebook faces intense competition from other enterprise social platforms such as IBM connections, Salesforce Chatter, etc. which are already established in this market.
We believe Facebook’s enterprise potential has a popularity advantage over other players and can appeal more to small and medium enterprises, start-ups and corporates in emerging markets. If the company is able to create an innovative product with advanced features without compromising on the security of the data, it has a potential to capture large companies and generate higher revenues for Facebook.
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