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Facebook IPO: we do radio and compete with radio stations for advertisers

As everyone paying attention to the news knows, Facebook’s first Initial Public Offering S-1 statement is out, and it’s a fascinating read. No need to get into an extensive analysis of the whole $5 billion shebang here, but it’s worth noting that Facebook clearly sees itself as a player in the radio business and a competitor with broadcast radio. Here are the relevant excerpts:

On page three of the IPO, Facebook mentions its radio interface with Pandora as a key way that the application creates value for developers:

Personalized and Social Experiences. We enable Platform developers to create better products that are personalized and social and that offer new ways for our users to engage with friends and share experiences across the web and on mobile devices. For example, a Facebook user can visit the Pandora website and immediately begin listening to a personalized radio station that is customized based on the bands the user Likes on Facebook.

On page 78 Facebook predicts that companies that traditionally advertise with radio will gravitate to the social networking app:

Television, print, and radio accounted for $363 billion, or 62% of the total advertising market in 2010 according to an industry source. Historically, advertisers interested in generating awareness of and demand for their brands have heavily relied on these offline media to reach their audiences at scale. We believe that these brand advertisers will increasingly dedicate a portion of their advertising dollars to Facebook because the broad audiences they are trying to reach are active on Facebook on a daily basis, because we can reach their desired audiences with precision, and because they can spark word of mouth marketing through Facebook. In December 2011, an advertiser could reach an estimated audience of more than 65 million U.S. users in a typical day on Facebook. By comparison, the 2011 season finale of American Idol was viewed by an estimated U.S. audience of 29 million people.

It’s evident that Facebook sees itself as a provider of every possible kind of media, and an attractor of every possible kind of media advertiser. Radio is part of the equation. With 845 million active users, how could it be otherwise?


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