George Magazine

MAKE THEM PLAY BY YOUR RULES. RAY VALDES, RESEARCH VICE-PRESIDENT, GARTNER The real significance of Facebook, according to Ray Valdes, is that in the social media space, it has become "the playing field, not just a competitor ... They are the territory on which others compete," he says. Valdes, who has close connections IN MAY , one day after raising $16 billion on a Nasdaq listing, Mark Zuckerberg wed his fiancée Priscilla Chan in a modest backyard ceremony and served his guests cheap Mexican food. Wedding complete, he posted a picture of himself and his new wife on Facebook and changed his relationship status to 'married'. It is clear Zuckerberg is a new and different type of corporate player, according to Laurel Papworth, CEO of social media manager The Community Crew. "This is not a guy who sees the IPO as being the be-all and end-all or the thing that's going to make him mega-rich and he can retire on," says Papworth, who Forbes magazine last year named as one of the Top 50 Social Media Power Influencers in the world. "He saw it as being something he had to get out of the way so he could go home and get married. That's a different kind of personality than we're used to." She believes Zuckerberg is cut from a similar cloth to tycoons such as Rupert Murdoch and Steve Jobs, both of whom engaged in the corporate world for the pursuit of ideas, influence and power—with money just a rewarding side benefit. "The money still comes, but that is not their motivation," Papworth says. Founded in a Harvard dormitory in 2004 by Zuckerberg and some college friends, Facebook now has almost a billion users and is the world's number one online social network, challenging other web titans such as Google and Yahoo! for consumers' online time and advertising dollars. On the back of a vast network, economies of scale, customisation and market power, it has collected deep pools of customer data that it sells to advertisers. Although Facebook's shares have dropped significantly from their initial price, with some investors filing lawsuits over the handling of the IPO, it is still a formidable force. Zuckerberg and his executive team are now trying to refocus the company's reliance on display advertising to draw more revenue from its growing mobile audience on smartphones and tablets such as iPads. Facebook generates most of its revenue—more than 85 per cent in 2011—from advertising, >> with Facebook engineers in California, says Zuckerberg's commitment to ongoing innovation is legendary. "His vision and drive have been the consistent threads that bind the success of Facebook." Valdes believes the criticism of Facebook's stockmarket listing is instructive for other social media entities trying to make it big. After the dotcom bubble burst in the early 2000s, technology entrepreneurs adopted a lean, efficient model, but the hype around Facebook and its IPO again raised expectations of a huge payday. "Those expectations have now fallen back to earth again, so they will have to [go] back to their tried and true habits of working in a lean mode." Valdes says successful social media platforms will have to cleverly take advantage of consumer data and turn it into business profits, while the greater use of mobile devices will change access to systems and create new opportunities for growth. "It will require innovation that has yet to happen." george.facebook 8

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