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Stand still and get left behind!

06 August 2012

'Facebook investors brace for further losses' was the one-time unthinkable headline in the Guardian this week. How easy it is to drop from Hero to Zero, underlining the need to constantly challenge and change to stay in front.

Facebook had over 835 million active users at the end of March this year according to 'Internet World Stats' (http://www.internetworldstats.com/facebook.htm) , having growing from 664 million in one year. Interestingly though, Facebook users in North America were 173,640,240 in March 2011 and only 173,284,940 a year later - an actual drop in active users. This should have been telling us something. Customers are fickle creatures and loyalty can never be taken for granted.

In one area specifically, Facebook has admitted to being behind the curve. It is not effectively monitising mobile usage and it fully acknowledges that its users are migrating. In their own words:

[W]e anticipate that the rate of growth in mobile usage will exceed the growth in usage through personal computers for the foreseeable future and that the usage through personal computers may continue to decline in certain markets...

Growth in use of Facebook through our mobile products, where our ability to monetise is unproven, as a substitute for use on personal computers may negatively affect our revenue and financial results.

Our view:

No one has a crystal ball - but often companies don't even take action to keep pace with what they do know. One of the challenges with customers is you have to operate on their time schedule if you want to be a customer-focused business. Facebook is a salutary example. Who could fail to notice the use of mobile products over the past few years? You only need to be on public transport (or a parent!) to appreciate the power of the mobile phone - and Facebook appears not to have factored this into their revenue model.

This has to be a timely lesson. Maintaining the 'status quo' is not an option for survival or growth. Investing in change is not a cost, it is a safeguard. In our opinion, every innovation that's significant and profitable and interesting is going to take, at the least, years to deliver. Total Systems recognised this by starting the investment in 'bluescape' in 2008, so we are ready to help other Organisations meet the challenges of today's customer before they miss the boat.

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