We've seen a variety of responses in regards to our Facebook Wall of Shame infographic. Some loved it and considered it a welcomed critique. Others were angered that WordStream would dare talk badly of their beloved social media platform. Many were convinced that we had a bone to pick with Facebook or had a personal vendetta.
Of course that's not the case; we simply wanted to point out some of the missteps of a company that has done many things well—after all, this is Facebook we are talking about! Twitter also integrates into other forms of traditional media, such as radio and TV. Successful Japanese brands leverage this for cross-platform marketing campaigns. Instagram is currently the fastest growing social network in Japan with 9 million added users in alone. Instagram is highly visual and a good venue for marketing fashion, food, and entertainment.
LINE is a messenger app first and a social network second and most LINE activity is strictly in private and group chat rooms rather than on a timeline function. Companies can also send coupons via direct messages that can be redeemed at stores or websites. LINE offers any easy way to reach all demographics due to its wide user base. With 30 million users in , Facebook in Japan is mostly older and male, with fewer young women in their teens and twenties who tend to flock to the flash of Twitter and Instagram.
But there is rising use among young professionals. Some of the biggest brands include alcoholic beverages, travel and airlines, shopping malls, and job listing websites. What Facebook does excel at is ad targeting. For this reason, high-end products, family-related goods, and even B2B products may find their audience on Facebook.
Technology has changed a lot since the mids. In , we have stronger processing power, more memory, faster wifi, and richer content. All internet-related businesses need to understand how to market to mobile devices effectively to give consumers a seamless online experience.
Only companies that can do this stand a chance of winning the markets of and onward. Companies that typically fail in Japan are those that may be hugely successful in their home market and think they can copy their success story by doing everything exactly the same in Japan. Btrax Senior Advisor, Hidemaru Sato, who has a track record as country manager for both Japanese companies in the US, and American companies in Japan, believes the answer lies with the country manager. He says you can learn from the mistakes of other companies who fizzled out in Japan because they failed to understand cultural differences.
There are many examples of companies that failed to do their homework on Japan and have paid the price.
An example is eBay. Auctions who knew how the Japanese liked to bid. New technologies will be applied to many consumer services and systems in Japan over the next few years. Companies that understand how Japanese consumers use tech can leverage these strengths to help them come out on top. None of this is to say that the Japanese consumer base is too shy to try new services or products. Brand-adopting Japanese consumers are always on the lookout for the next innovative thing.
She had been using the site to connect with family and friends since , and almost everyone she knew had an account. Now, as she watched the TV in eager anticipation, millions of shares were going to leave the hands of private investors and start trading, giving anyone with enough money a chance to own a slice of the social network giant.
Silence descended as Zuckerberg came forward to deliver his speech: "I just want to say a few things, and then we'll ring this bell and we'll get back to work.
Right now this all seems like a big deal. Going public is an important milestone in our history. But here's the thing: our mission isn't to be a public company. Our mission is to make the world more open and connected Finally he reached the moment so many were waiting for: "So let's do this! Minutes later, Swaminathan's online order was executed, and the retired schoolteacher had just spent approximately half her life savings.
For Mark Zuckerberg, selling Facebook shares on the public market had a clear downside. Besides the headache of releasing a company's financial details to the public, he worried that increased scrutiny and push for profits would compromise Facebook's mission.
But like any growth-stage company, Facebook needed money, and private companies face restrictions on how much stock they can issue for cash. In early , Goldman Sachs helped Facebook conjure IPO-type money without an actual IPO by creating a special investment product to sell its private shares to Goldman's wealthiest clients.
Soon after, Zuckerberg decided to take the company public. On February 1, , Facebook filed its Form S-1 -- effectively a birth certificate for publicly traded companies -- containing everything an investor needs to know before buying shares at an IPO, including basic financial information and the business model.
The S-1 is especially meaningful to investment banks. Facebook listed its underwriters -- the banks picked to buy and sell shares on the IPO -- near the front of the document, from left to right, in order of responsibility, with Morgan Stanley in the coveted "left lead" position.
This put Facebook's IPO in the hands of one of Silicon Valley's most celebrated bankers: Michael Grimes, co-head of global technology banking at Morgan Stanley's Menlo Park office, located just a few miles north of Facebook's headquarters. Michael Grimes, the son of a mapmaker, is a lifelong Californian with a bachelor's in computer engineering from UC Berkeley. A titan in the world of tech IPOs, his status grew not only from expertise in taking small and large digital companies public, but also from his myth-making showmanship.
To win Ancestry. To get a Hewlett Packard acquisition, he waited outside an executive's office for hours just to make a pitch. With Grimes and the investment bank prepping the offering and building demand for shares, it fell to another Morgan Stanley employee, Scott Devitt, to tell outside money managers whether they should buy Facebook stock. As the head of Morgan Stanley's Internet equity research team, Devitt makes a month target price for stocks and provides a rating -- buy, hold, or sell -- for hedge funds like Citadel and large, storied institutional investors like Fidelity.
Devitt's agreement with his clients guarantees an independent analysis of company performance -- even if Morgan Stanley is leading the IPO. The stark division between these two functions of a bank is known as a "Chinese Wall.
Morgan Stanley and other brokerage firms were slammed with fines for repeatedly breaching the "Wall" during the dot-com boom. In the aftermath of the Facebook IPO, the bank would find itself under the spotlight yet again for allegedly sharing key, private information with wealthy clients. A roadshow -- a city-by-city promotional tour where executives drum up support for their IPO before large investors -- is typically a lackluster affair.
Facebook's was more like a Hollywood party. A crowd of paparazzi greeted them, and a long line of onlookers wound around the hotel building. Inside the meeting, Facebook played a video introducing the business model to special clients of its underwriting banks.
Although an IPO roadshow is supposed to be an untarnished hype-machine for a company's prospects, back in California, those prospects were hurting. Facebook's new internal forecasts showed revenue growing slower than expected. The reason: Users were flocking to smartphones faster than the company could serve mobile ads.
On the first day of what may have been the most watched IPO roadshow in memory, Ebersman confessed to Morgan Stanley that Facebook had cut revenue projections -- a nearly unprecedented last-minute correction in an IPO of its scale. Even if the changes were small, statistically, in IPO showbiz statistics run second to momentum, and nothing kills momentum like a poorly timed downward revision.
Facebook and Morgan Stanley knew they had to make a public disclosure. But what to disclose? The law requires companies to share all information that would likely influence an investor's decision to buy stock.
Plus, Morgan Stanley's research team was still advising clients based on figures that Facebook now considered wrong. With less than a week before the IPO, they came up with a solution that they thought would spare Facebook a modicum of embarrassment -- but would have fateful consequences for Morgan Stanley and investors:.
When a company makes an amendment to its S-1, the entire document can be filed again, without track-changes or highlights to specify the changes. When Facebook filed its "Amendment No. On page 14 and 17, the company said that its users were growing faster than ads due to the increased use of mobile phones and product decisions that allowed fewer ads per page.
On page 57, Facebook said the mobile trend discussed elsewhere in the document had continued in the second quarter, due to users shifting from computers to phones.
None of the changes suggested any major revision to Facebook's financial outlook. Facebook's lowered revenue estimates did not appear in the S-1, nor was there any precedent requiring these numbers to be included. Even the most sophisticated retail investors, armed with a software bot that could comb the new S-1 for updates, could not have read what research analysts at Morgan Stanley, JP Morgan, Goldman Sachs, Citigroup, and many other investment banks would learn later that evening: That Facebook, already projected to trade at high multiples given its earnings figures, was slashing its annual projections.
Before an IPO of Facebook's size, research analysts and large investors play a massive multi-billion-dollar game of "Telephone," because analysts at underwriting firms are banned from publishing or emailing research about a new public company until 40 days after the IPO.
The rule is designed to protect retail investors from taking analysts' notoriously bullish research too seriously. But it has an unintended side effect: Research analysts can pass on exclusive, last-minute information to institutional clients without a paper trail.
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