Critical Analysis: The Transformative Impact of Facebook

Facebook CEO Mark Zuckerberg (Brifly)


Facebook CEO Mark Zuckerberg (Brifly)

Image 1: Facebook CEO Mark Zuckerberg (Brifly)

The purpose of this essay is to critically analyze the transformative impact of the social media networking site Facebook. The paper introduces the company with a brief historical overview of its development since its inception in 2004. The business model of Facebook, which governs the platform and its billions of users, is discussed briefly with an emphasis of its owner and the key figures of the company. While Facebook is a multidimensiaonl subject from a research perspective, some of its most influential dynamics are analyzed and discussed. First, Facebook has evolved from a social media network to a platform for businesses. This has changed the way businesses work by introducing an online ecosystem where millions of small and medium businesses are thriving. Second, since Facebook is open to all and provides various means to express thoughts and opinions, there are major cultural and social implications. The most important findings of research on cultural and social changes influenced by Facebook are discussed. Like any business model, Facebook too has had its fair share of failures where the company failed to consider public interest and only catered to monetizing sensitive data. This leads to the last part of the critical analysis where it is argued that Facebook had sold personal data of millions of American Facebook Users that had a part to play in the presidential elections of the United States.

Historical Overview of Development

Facebook’s founder, chief executive officer (CEO) , and chairman is Mark Zuckerberg. The chief operating officer is Sheryl Sandberg , the chief technology officer is Mike Schroepfer, the chief financial officer is David Wehner, and the chief product officer is Chris Cox. Facebook owns some of the most popular downloadable mobile apps. Instagram and Whastapp were purchased by Facebook for $1 billion and $19 billion, respectively. Besides that, Facebook also owns the mobile Facebook app and Facebook Messenger, which are among the top most downloadable apps (Shead, 2019). Facebook was first launched as a social networking site in 2004 following which third-party developers began integrating with Facebook. It was launched as a Platform in 2006 and 2007 since when Facebook laid out boundary resources that allowed developers to program the architecture of Facebook to improve its functionality and create inbuilt applications (Helmond, Nieborg, & van der Vlist, 2019).In 2010, Facebook had evolved greatly with its first iteration of the developer platform that had the new feature of “Graph API”. Since then, Facebook has been releasing newer versions with regular updates and introduced  software development kits that enables developers to build apps for Facebook mobile which largely contributed to creating Facebook’s mobile ecosystem. From 2013 to 2015, Facebook had acquired a significant capital from the initial public offering which led the company to make high-profile acquisitions along with the expansion of its user base. Facebook’s programming evolved with the development of Messaging Application Programming Interface (MAPI). The architecture and the business model was redesigned in 2018 that redefined its technical boundaries and resources for marketing developers and businesses. Facebook then went on to acquire Instagram and Whatsapp Messenger which are two of the most popularly used mobile networking applications. Thus, Facebook has a multidimensional market strategy and high-profile corporate partnerships that the company acquired through certificate mechanisms and partner programmes.

Business Model and Research Agenda

       The business strategies and agenda of Facebook has been constantly changing over the years with new company acquisitions and larger platforms enhanced with advanced technology and self-learning algorithms. With a larger environment and growing user base, Facebook’s architecture, control mechanisms, governance frameworks, and interfaces have greatly changed since its inception. After the privacy scandals and data leaks by Facebook, the company was compelled to change its “Terms and Conditions” and privacy policy. The business model of facebook has undergone changes since it was founded but one of the most important features has remained constant – its reliance on consumer engagement (Burt, 2019). Facebook’s business model primarily depends on consumer engagement. However, there are speculations that the business model is not nearly sustainable enough because it is next to impossible for one company alone to govern an ecosystem of more than 2 billion people in the world. Therefore, cybersecurity issues, propaganda, and privacy issues are inevitable.

Interdependence of Facebook with partners, third-party companies, and user-base

Image 2. Interdependence of Facebook with partners, third-party companies, and user-base

Impact of Facebook on Online Business Models

Social media such as Facebook has provided small and medium sized businesses a platform with access to billions of users worldwide to not only conduct their business but also grow the brand (Sarkar & Ghosal, 2018). Businesses require exposure to enhance the customer base which is where social media like Facebook offers a plethora of options. Research reports have found that most businesses are becoming aware and keen to involve social media for marketing, recruitment, and communication strategies (Kietzmann et al., 2011). The business models of companies and businesses have shifted towards social media from several perspectives. Recruiting employees and searching for candidates to fill vacancies are commonly done on Facebook (Hunt, 2010).  Communications and value proposition activities are also done on Facebook through its multiple business tools and communication system (Coulter, Bruhn, & Schoenmueller, 2012). A study found that restaurants commonly often use photos for advertising and marketing strategies on Facebook (Zhang, Huang, & Yu, 2015). While videos are not very popular, the number of “Likes” a photo receives greatly contributes to the brand image.  Social media like Facebook helps promote communication between management and employees, enables the promotion of better content, allows users to provide feedback, and create brand awareness (Edosomwan, Prakasan, Kouame et al., 2011). Therefore, business models have been significantly influenced by Facebook and its evolution over the years. Small and medium businesses have certainly found a platform that is easily accessible and effective despite the steep competition.

Influence of Facebook on Political and Social Change

       Facebook has a user base of more than 1 billion which has led to a humongous volume of data. Analysis of the data in the initial phase revealed positive political attitudes and political participation through expression of opinions (Boulianne, 2015; Gil de Zúñiga, Jung, & Valenzuela, 2012). Political engagement has been further enhanced with the involvement of politicians and activists on Facebook. While social media content is geared towards political activism, it is not necessarily used in ethical ways. For example, Facebook was involved in the Cambridge Analytica case where the leaked data was used for political purposes on millions of Facebook users. The continuous use of Facebook has been transforming the social, political, and cultural climate on the internet. Besides political engagement, Facebook also plays a role in the cultural change on the Internet. A study by Waters & and Lo (2012) was conducted on cultural orientation in America, China, and Turkey with the aim of exploring the cultural sphere in Facebook. The results revealed that there is a mixed support regarding traditional cultural expectations which suggests that the connectivity provided by Facebook contributes to a rather blurred cultural boundary and promotes an alternative virtual culture. Given the large user base of Facebook and the freedom of expression online, it is rational to posit that long standing exposure to cultural practices can lead to internalization of cultural predilections that will impact social cognition in both the cyberspace and in real life (Huang & Park, 2013). Therefore, it can reasonably be stated that Facebook is a powerful aid that has a significant influence on political and cultural landscapes.

Mark Zuckerberg at the testimony for Cambridge Analytica case (Bort, 2018)

Image 3. Mark Zuckerberg at the testimony for Cambridge Analytica case (Bort, 2018)

Regulatory Debate and the Cambridge Analytica Case

       Facebook has been under scrutiny for several years to come after its association with the Cambridge Analytica scandal. Cambridge Analytica is a voter-profiling company which has reached out to millions of facebook users on Amazon’s mechanical Turk which is an online marketplace that allows people to perform various tasks and make contacts. American Facebook users were the targeted users who were later manipulated by Cambridge Analytica. More than 270,000 users had downloaded the paid app which also required personal data of the users from their Facebook accounts. The personal data thus gathered by Facebook was given to Cambridge Analytica which was misused (Isaak & Hanna, 2018). The breach of privacy and security by stealing and selling data continued until data was harvested from over 50 million people (Tufekci, 2018). There are reports that claim that this was done to interfere with the United States elections. Following the presidential election of Donald Trump, a year had passed when The Observer of London and The New York Times had publicly announced that there was a data breach. However, Facebook defended their case stating that the data breach could not be proven technically because the users  had provided their data according to their will. However, Facebook’s business model involved using its users’ data and selling them to political actors and advertisers who use personal data to target advertisements and claims (Tufekci, 2018).

Facebook’s response to their involvement and charges in the Cambridge Analytica controversy showed that the public relations department of the company had deliberately denied the fact that their business model had enabled political microtargeting and advertising services. However, evidence pointed out that Facebook was undoubtedly involved in Cambridge Analytica’s endeavor of data gathering (Bruns, 2019). Translational and national regulatory initiatives include the General Data Protection Regulation (GDPR) of the European Union and the 5 billion USD fine which has been imposed by the U.S. federal Trade Commission (FTC) on Facebook (Overly & Scola, 2018). Most critics maintain that Congress and the European Union Parliament are the most capable governance bodies that can introduce effective regulatory practices that take public interest as a high priority. However, given the circumstances, the American political scenario makes it difficult to have leverage over Facebook.


       Facebook has had a major presence in the online ecosystem and has impacted almost every sector. With a growing consumer base and greater revenue generation, Facebook has obtained significant mergers and acquisitions. Although Facebook has been rightly accused of data theft, privacy leak, security leak, lack of protection of public interests, and data manipulation, its consumer base still continues to grow. One of the reasons which can account for the overwhelming consumer base is that most users are unaware of how their data is used or what their privacy and security rights are. Moreover, several supporters and critics maintain that a company with billions of consumers is highly likely to undergo such issues. Besides, Facebook’s dominance on the digital platform provides a tough competition to other social media networks which is also responsible for its growing audience. The present paper critically analyzed Facebook’s transformative impact and concludes that it should mindfully revise its business model, protect public interests, and integrate the highest security in its platform and applications.


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Yihan Wang
About Yihan Wang 1 Article
Hi i am Yihan from China.I am studying in USYD .