Three Ways Facebook Inc (FB) Could Improve Its Business

Perhaps more importantly than the fees generated from daily deals is how Facebook could begin changing the consumer mind-set that its brand isn’t only a platform for communication and entertainment, but it’s also a platform for commerce. This could go a long way toward driving higher marketing spend because companies could be inclined to pay more for advertising if they knew a user was more in the mood to buy.

Close that gaping hole
Frankly, the fact that Facebook Inc (NASDAQ:FB) is providing a free service for businesses to directly promote themselves to customers and potential customers is doing a disservice to investors. For the businesses that have organically built up a large Facebook following, there’s little, if any, incentive for them to spend money on advertising. This could be why less than 6.25% of businesses on Facebook are currently active paying customers. If Facebook were to begin charging a monthly subscription fee for businesses with a large following, it could significantly drive new revenue growth while simultaneously locking businesses into the ecosystem that want a social media presence.

Pay up, marketers!
As I highlighted earlier, Facebook Inc (NASDAQ:FB)’s greatest challenge is to grow ARPU without detracting from the user experience. The ideas I’ve suggested will help drive ARPU growth by putting the burden more on marketers and businesses rather than the user itself. In fact, if Facebook were to implement either of the localized suggestions, it would likely improve the user experience.

With a few relatively simple moves, it’s become clear that Facebook has the power to potentially improve the long-term outlook for investors. Let’s just hope someone’s listening.

The article 3 Ways Facebook Could Improve Its Business originally appeared on Fool.com.

Fool contributor Steve Heller has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Facebook. It also owns shares of Microsoft.

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