According to statistics released today, by Internet World Stats, almost 10% of the world’s population uses Facebook. As of March 31, more than 664 million people use the social networking site. This announcement comes at a time when Facebook is brushing off lawsuits and allowing open access to it’s “vanity free” server technology. Despite Facebook’s enormous global reach, market analysts do not expect the website to have a significant effect on e-commerce.
Internet World Stats releases regular reports of global internet usage and population statistics. According to the report released on 12 April 2011, Facebook is used by 9.6% of the world’s population with the most users living in Europe, which represent just over 30% of all users.
Africa is relatively low down on the list, coming in 5th place behind North America, Asia and Latin America. The 27 million African Facebook users make up 4% of the global behemoth.
Due to this enormous growth, Facebook has had to make substantial investments in hardware and software. In an unusual turn, Facebook has embraced its “hacker” roots and made the specifications and mechanical designs for its servers and data centers open to the public. Facebook has done so through the recent launch of the Open Compute Project. Facebook’s data center is 38% more efficient and 24% less expensive to build and run than other state-of-the-art data centers (according to the 2007 report to Congress on Server and Data Centre Efficiency).
Facebook has also been trying to tap into the global e-commerce market, but a recent report by Forrester Research analyst, Sucharita Mulpuru, says that the company will not have a significant impact in this area. According to the Wall Street Journal, Forrester Research interviewed “nearly two dozen technology vendors, retailers and marketers and found that they received little benefits from Facebook and other social networks.”
The Wall Street Journal states that, according to Mulpuru’s research, “a social-network presence was less effective at customer acquisition and retention than e-mail and paid search. The study found that the average Facebook metrics are a 1% click-through rate and a 2% conversion rate. E-mail marketing, by comparison, has an 11% click-through rate and a 4% average conversion rate.”
“Facebook’s problem is that few people go there for shopping-related activities. You go to Facebook to find other people, not to find a product,” Mulpuru said in an interview with the Wall Street Journal.
While merchants experiment with “like” buttons and targeted discounts, the consensus is that Facebook will not become a strong player in the e-commerce field. Mulpuru did point out one interesting area in which Facebook might have a positive effect, Facebook could help some companies, such as those that sell digital media and goods, such as video-game maker Zynga.
Personally, I will keep using Facebook to keep in touch with my friends and family, but I will never trust them with my credit card details. What do you think?
By Angela Meadon
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