It’s said that Facebook could be worth $100bn if, as widely predicted, it floats on the stock market next year.

That would make it as valuable as Amazon (in business since 1995) and McDonald’s (1940) and twice as valuable as Tesco (1929). But Facebook was launched a mere seven years ago, by then college student Mark Zuckerberg and his Harvard friends.

Can a $100bn business have been created so fast? It may sound incredible, but there are reasons why Facebook just might be worth that much.

If you look after the pennies…

First, Google – now worth around $200bn – set a new model for Silicon Valley when it went public in 2004, the year Facebook was founded.

It built a global audience before working out how to make money, proving that if you can attract a big enough audience, there will always be ways to “monetise”. Ad revenue per user can be tiny and still add up to huge figures. So Facebook’s current 800 million users are an extraordinarily valuable asset.

And Facebook has a couple of trump cards over Google.

It’s the ultimate “sticky” site, with users spending much longer on it per session – about 30 minutes on average – than people do on Google. That’s more time to see and respond to ads.

Everything Facebook is doing to develop as a business, such as the forthcoming personal Timelines, is designed to get people even more hooked.

Zuckerberg says its all about giving users better things to do. “We’re not trying to make it so that people spend a lot more time on Facebook,” he said. “We want to make it so the time you spend on Facebook is so valuable that you want to keep on coming back every day.”

Knowing you

Another key advantage is that while Google often doesn’t know much about its users, Facebook is a treasure trove of personal information. Unlike Google, you can’t use Facebook without logging on; and the only point of doing so is to talk about yourself and share your interests.

That makes it, in the words of Facebook chronicler David Kirkpatrick, “probably the most valuable market research tool that’s ever existed”.

It gives advertisers the chance to target exactly the kinds of people they want to reach. So if you’re selling a product to women who are about to get married, when you place an ad you can click the “engaged” tag, and “women” and only show the ad to brides-to-be.

Zuckerberg himself has always been reluctant to allow intrusive ads – so much so that in the early days Facebook ads sat below a cheeky caption that read: “We don’t like these either, but they pay the bills.”

Today Facebook hopes that offering ads which users are more likely to be interested in will mitigate the intrusion. And when friends are drawn into the process with what Facebook calls “social ads”, perhaps ads will become not just acceptable, but even welcome.

If it’s a choice between a straight ad for a product, and a social ad that tells you that one of your friends likes the product, Zuckerberg asks, “which do you think people who use Facebook prefer? They want to learn about what their friends are doing.”

Generating demand

For Sheryl Sandberg, chief operating officer and effectively Zuckerberg’s number two, Facebook has already found its own niche, avoiding direct competition for ad revenue with her former employer, Google.

Sandberg distinguishes between demand fulfilment ads – Google’s speciality – and demand generation ads, which she sees as Facebook’s strength. She cites TV ads as an example of the latter. You aren’t asked to go and buy something immediately; rather you are introduced to new products and ideas.

“Part of the challenge in moving dollars online is that the demand generation dollars have not moved online as effectively,” Ms Sandberg says, “and that is 90% of a $650bn industry.”

Commercial peril

Not everyone is convinced: Sir Martin Sorrell, chief executive of advertising giant WPP warns that Facebook is “a social network, not a commercial network. And therefore you use it commercially at your peril.” Sir Martin sees Facebook as a good opportunity for public relations, rather than as “an in-your-face advertising medium”.

Facebook’s advertising revenue is rising fast, and is expected to top $3bn this year. But already half the population of Britain is on Facebook, with similar figures in other developed countries. No wonder that Zuckerberg sees future growth not in signing up new users, but more in making existing users even more attached to the site.

But as Fortune magazine technology writer Jessi Hempel jokes: “We do need time to eat, sleep, and interact with friends in real life, or we’ll have nothing to photograph and post on Facebook. So there are natural limitations to that.”

By Charles Miller producer of Mark Zuckerberg: Inside Facebook

BBC News – 01.12.2011

http://www.bbc.co.uk/news/business-15962476

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Contextual link building is a highly effective link building strategy and research shows that Google values these type of links more highly, as they appear far more natural than a web page containing nothing more than a simple list of one way links. The reason contextual link building is so powerful is because the links are placed inside the relevant body text area of a web page rather than appearing out of context, as separate standalone one way links.

Contextual link building is more difficult than building traditional one way links, but can be achieved by writing blog comments and producing keyword rich articles, that include a couple of embedded links within the content. These articles should then be submitted to the various social media websites rather than specialist article directories, who do not allow embedded links within the main content.

The main reasons why contextual link building is more powerful than standalone One Way Links, are as follows:

• Contextual links are placed within the body text and are surrounded by other content
• Contextual links look more natural to Google and the other main search engines, such as Yahoo and Bing
• Contextual links carry more weight than traditional standalone one way links.
• Contextual links do not get removed over time and are considered a more permanent type of one way link.
• Contextual links will help to improve the number of visitors to your website

By developing a contextual link building strategy you will find that the overall link popularity of your website will improve dramatically along with your search engine ranking results.

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It is extremely important that in addition to the Home Page of your website, all of your main internal web pages are also indexed by Google. It is quite common for brand new websites or poorly promoted sites to have numerous internal web pages that have never been indexed by Google or any of the other major search engines. This means that your website in unable to deliver its full potential and will fail to be listed for all of your targeted keywords, as the search engines will only have limited information about your website, contained in their database

Below are my top 5 tips that will help you improve the number of web pages indexed in Google and other major search engines such as Bing, Yahoo and Ask.

1. Create an XML sitemap.

Create an XML sitemap for your website, to include all of your web pages and submit this to Google and the other search engines. An XML sitemap provides a standard way of organising your web pages that is easily understood by the search engines. They will be able to find your XML sitemap file on your server and use the data to navigate to each page of your website. This will enable them to find all of the relevant data faster and more efficiently.

You can create an XML sitemap from scratch or use one of the many online tools, such as XML-Sitemaps.com, that will automatically generate a sitemap for you. For further information on the benefits of using an XML sitemap for your website see Google’s Webmaster Guidelines.

It is important that your sitemap is updated each time new pages are added to your website.

2. Use Google Webmaster Tools

If you have not already done so, I would recommend registering your website with Google’s Webmaster Tools. These tools provide an easy way to submit your XML sitemap to Google and also allow you to monitor the indexing status of your web pages.

3. Develop a robust internal page link structure

The internal linking structure of your website will determine how successfully Google indexes your web pages.

Google’s spiders navigate your site by finding the relevant links that enable them to move from page to page. It is therefore extremely important that all your web pages can be easily found through your internal linking structure.

As mentioned above, the easiest way to solve internal linking issues is to create an XML sitemap, which should contain links to all of the pages on your website.

4. Build back links to your internal web pages

When developing a link building strategy, many people fall into the trap of focusing solely on building external One Way Links to their Home Page. In order to improve the indexing of your internal web pages it is also important that you build one way links to all of these pages. As more of your internal web pages get indexed by Google and the other search engines, the more likely it is that you will appear in the organic listings, for your targeted keywords.

5. Create and promote fresh content on a regular basis

Adding new and fresh content to your website, on a regular basis, will encourage Google’s spider bots to return to your website on a more frequent basis.

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In addition to the keyword bid price, Google Adwords uses a quality score to determine the overall position of your ads in the search engine results.

Generally, a high quality score will reduce your cost per click rate and improve the position of your ads in the ranking results. Therefore it is important to understand how the Google Adwords quality score works and how you can improve it.

Google Adwords quality score

The formula behind Google’s quality score contains a number of key components which are used to determine your ranking, as follows:

• The historical click through rate of your keyword and ad combination
• The historical click through rate of your display URL
• The historical click through rate of all keywords and ads in your account
• The quality and relevance of your ad content
• The quality of your landing page, which must contain original content that is easy to navigate
• The loading time of your landing page
• The relevance of your keyword and ad to the search query

The click through rate of your ad and keyword combination together with the quality of your landing page are believed to be the most important factors, which determine your quality score.

How to improve your Google Adwords quality score

A good way to improve your quality score is to create multiple ads using different titles and calls to action. You can then test these ads to determine which one works best from both a quality score and conversion perspective.

As mentioned above, landing page load times is one of the quality score factors. It is therefore very important to ensure that your landing page will load as fast as possible as Google will give preference to ads which have faster landing pages.

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Hitwise UK recently published a new report which confirms the benefit of creating and developing a Facebook business page to improve online awareness of your product or service and your brand.

According to the Hitwise Report, each new Facebook fan is worth an additional 20 visits to your website, over the course of a year!

The UK based study analysed data for the top 100 online retailers within the Hitwise “shopping and classifieds” section and compared this data with the total number of fans each brand had on their Facebook business page. The end result was that each Facebook fan created an extra 20 website visits.

The study also analysed the likelihood of customers searching for a specific brand after visiting the companies Facebook business page. The study established that Topshop outperformed their competitors, with over 50% of their customers more likely to search for the Topshop brand after a visit to Facebook, compared with traditional search results via the major search engines.

Other major UK retailers also experienced similar results. The Index column in the chart below details the likelihood of searching for a particular brand after visiting the companies Facebook business page.

This data is excellent news for website owners, as it helps to place a value on the effort required to market and maintain a Facebook business page.

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