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How Facebook Can Still Rule the Internet Economy

By Arun Sundararajan, Associate Professor of Information, Operations and Management Sciences and NEC Faculty Fellow

Arun Sundararajan on Steve Jobs

Facebook is positioned to radically expand digital marketing, moving us from today’s narrow, intent-based approach to a broader and more familiar persuasion-based model.... for that to happen... It must reinvent rather than replicate.

The unrelenting negative reports about Facebook Inc. (FB) are enough to rattle even the true believers among us.

Since the initial public offering in May, the beleaguered chief executive officer and founder, Mark Zuckerberg, hasn’t found much to “like.” The company’s stock is down by more than 50 percent, an influential board member has unloaded shares, and Silicon Valley analysts are openly questioning the management.

Yet it would be premature to despair over the company’s long-term viability and health. Facebook is still potentially the most valuable information-based business. It had 955 million monthly active users at the end of June, and benefits from a tremendous amount of attention.

More than any other company, Facebook is positioned to radically expand digital marketing, moving us from today’s narrow, intent-based approach to a broader and more familiar persuasion-based model. For that to happen, it needs to step out of Google Inc. (GOOG)’s shadow and embrace a strategy that plays to its strengths and unique position at the center of today’s Internet. It must reinvent rather than replicate.

Read full article as published on Bloomberg.