Analysis of Facebook

691 words | 3 page(s)

1. Although nobody knows for sure if they have a hugely successful company when they first launch a company, there are some ways to predict the outcome. First off, if you have developed a new concept that no other company on the market has matched, such as Facebook, chances are good that the company will be a success. One of the most successful companies in the world, such as Apple Inc., has been able to maintain huge success by offering new products. For instance, Apple Inc.’s market value was approximately $623 billion during 2012. This was largely due to its iPhone products, which other companies could not really match well or substitute easily. Instead of just sitting back and enjoying their success, Apple Inc. continues to revamp itself, constantly changing and updating its products by adding new features that attract consumers (Inc, 2011). Recently, the national news has been publicizing how Facebook has been working on using its messenger app so that people send money and make purchased on the app. The new app appears to mirror PayPal. This can help Facebook maintain its success.

2. Unless the company is very small or a local company, I feel that all companies should take necessary precautions, especially ones that Facebook did not take. Partnership and ownership issues need to be clearly drawn out, including definite time frames for when and how profits should be distributed. According to Forbes magazine, a business partnership should have five essential elements that are discussed and agreed upon. These elements include capital contribution, decision making, salaries and distribution, death and disability, and dissolution (Neville, 2013).

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3. I think that they should have drawn up legal agreements that stated exactly when partners and investors would reap the benefits of money. Zuckerman just stating a 30 % profit promise with no other rules and conditions was not a smart choice. The television show “Shark Tank,” a show that sets up people who have business ideas with investors for their project, clearly outlines the expectations of the business deal. For instance, one of the investors may say, “I will give you $50,000 in cash, but I get 10% of every dollar that you make for 6 months. After that, I get 5% of every dollar that you make” (Burnett, 2009-2015). There seemed to be some failed communication on both parties during Facebook’s planning stages, the business stipulations too general. Abrams suggests that goals, jobs and responsibilities, type of communication, and exit strategy and a dissolution plan should also be discussed, something that Zuckerman, partners, and investors failed to do when they were stating their business terms (Abrams, 2012).

4. One of the first things that should have done is to get in writing that Zuckerman could not steal their ideas or try to pass any of their ideas off as his own. In the contract, another thing should have been documented is the following: that Zuckerman could not work or start a company that was in competition with their company. This would have saved both parties some heartache and time and ensured that everybody was on the same page in regard to expectations, rules, and guidelines. In addition to this, the Winklevoss twins and Divya Narenda should have copyrighted their ideas and website so that Zuckerman could not steal the expression of Zuckerman’s idea. Said Abrams, “Copyrights do not cover ideas, no matter how unique—only the particular fixed expression of those ideas. For instance, you can’t copyright your idea for the story of a boy who goes to a school for wizards, but you can copyright your novel telling the story of that boy” (Abrams, 2012, p. 383). This would have made a difference with Facebook and who gets most of the money and credit for the website. With a copyright, Zuckerman may have lost much or all of his Facebook rights.

  • Abrams, R. (2012). Entrepreneurship: a real world approach. Planning Shop.
  • Burnett, M. (Director). (2009-2015). Shark Tank [Television Series].
  • Inc, A. (2011). ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. Washington D.C.: United States Securities and Exchange Commission.
  • Neville, A. (2013, June 7). Five clauses every partnership agreement needs. Retrieved from website :

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