Facebook: We can help small firms morph into big business

Social networking giant Facebook has claimed it is supporting more than 35,000 jobs in the UK as small businesses use its site to market themselves to a wider audience.

The US firm, valued at about $100 billion (£64bn), cited the example of Edinburgh-based Morphsuits, which has built up a cult following on the network and now sells its all-in-one bodysuits to partygoers around the world.

Quoting a survey undertaken by Deloitte, Facebook said it creates economic activity by driving demand for broadband and mobile connectivity, as well as creating an “app economy” of businesses designing software for use on its platform.

Richard Allen, Facebook’s head of policy in Europe, Middle East and Africa, told The Scotsman that the site had brought a social element to the internet that is of particular value to small firms seeking to build a wider client base without a large advertising budget.

He said: “There are businesses that use Facebook to engage new markets and develop a larger order book and are therefore able to employ more people.

“Morphsuits is a classic example as it has been able to grow the business in a way that wouldn’t be possible without the existence of this word-of-mouth marketing mechanism where it can build a loyal following that then passes on their recommendations to others with similar interests.”

Morphsuits was set up by brothers Ali and Fraser Smeaton and their flatmate Gregor Lawson in 2009, with £3,000 each. It now has more than 760,000 Facebook fans and has sold more than 500,000 of its spandex bodysuits, which are popular at fancy dress parties and events such as stag and hen nights.

Businesses can run a Facebook page for free, and they can then pay to use the network’s targeted advertising service.

The US group is launching a series of roadshows on building Facebook business pages, run in conjunction with the British Chambers of Commerce. One of the events will be in Glasgow.

Allen said: “Where we’ve seen small businesses be very successful is when they build a reasonable fan base. Particularly for a local business, just a few hundred people in a loyal fan base receiving updates from you on a regular basis can make an enormous difference.”

Deloitte estimates the Facebook app economy is worth an annual £467 million in the UK alone, with 7,500 employed in writing the software. Designing games for use on the social network is simpler than building blockbuster console games, and a number of small Scottish studios are working in that area.

Facebook, itself less than ten years old, is thought to be considering an initial public offering later this year. Reports suggest the world’s largest social network, which has more than 800 million users, is looking at raising as much as $10bn from the sale of a 10 per cent slice of the company.