Media, Innovation and Current Events | Facebook, Tech Talent, RIM

One of the biggest stories this week involving technology and media innovation was Facebook’s IPO filing. Startups that want to offer their stock to the public for the first time must file an S-1 form with the Securities and Exchange Commission. Investors and others closely examine an S-1, which provides the public a first complete look at a company’s financial track record. Facebook’s S-1 revealed that the company has been profitable for the past few years as the number of active users has grown to 845 million. Unsurprisingly, Facebook’s success primarily comes from advertising, which accounted for 85 percent of revenue in 2011.

Two risks in the S-1 stood out: Facebook’s biggest customer is Zynga, the maker of social games such as “FarmVille.” About 12 percent of Facebook’s revenue (advertising and a cut from transactions within the games) comes from Zynga. Facebook warned that it partly depends on its relationship with Zynga for its success. Facebook also is challenged by the shift from desktop and laptop computers to mobile devices. Although more than half of Facebook’s members use mobile devices to access the site, the company does not currently make any money from its mobile apps. “Growth in use of Facebook through our mobile products, where we do not currently display ads, as a substitute for use on personal computers may negatively affect our revenue and financial results,” the S-1 stated. In addition, “Facebook user growth and engagement on mobile devices depend upon effective operation with mobile operating systems, networks, and standards that we do not control.”

Facebook and other technology companies fiercely compete for programming talent in Silicon Valley and elsewhere. A story from The Bay Citizen on The New York Times’ website profiled a startup that has been trying to take advantage of this marketplace opportunity. GitHired, based in Austin, Texas, initially offered to put companies in touch with five talented programmers for a $1,000 fee. Customers “are hoping we are the answer to finding talent easier,” co-founder Rhett Creighton said in the article. At $1,000, GitHired received more requests than it was able to handle. The article noted that programming talent can be very important to a startup’s success, although that talent can be costly. For media innovators, it may be worthwhile to find technology that’s already available rather than rely on custom solutions needing extensive coding.

Another story on The New York Times’ website looks at a once-successful technology company that has struggled with new competition. Research In Motion, maker of BlackBerry smartphones, has lost market share even among business customers in North America to Apple and its iPhone. Now, it’s challenged in Europe by Samsung, which is marketing new Android phones to business customers. RIM is betting that its longtime strength, security, will keep it afloat. “When the first big security flaw even happens in one of the large enterprises, you will see this turn around,” new Chief Executive Thorsten Heins told The Times. However, RIM also acknowledges that it must appeal to individual business users as consumers, who have shown a strong preference for iPhones and Android devices.

Sources:

Chen, B. X. (2012, January 29). BlackBerry under siege in Europe. The New York Times. Retrieved from http://www.nytimes.com/2012/01/30/technology/blackberry-under-siege-in-europe-from-rivals.html

Facebook, Inc. (2012). Form S-1 registration statement (Securities and Exchange Commission filing). Retrieved from www.sec.gov/Archives/edgar/data/1326801/000119312512034517/d287954ds1.htm

Shifflett, S. (2012, February 3). A new resource for hiring programmers has become entirely too successful. The New York Times. Retrieved from http://www.nytimes.com/2012/02/03/jobs/githire-a-headhunter-is-swamped-after-promising-5-hire-worthy-bay-area-programmers-for-1000.html