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View Full Version : I have a silly little Facebook question...



Buzz
01-04-2011, 02:25 AM
I was just wondering how FB makes it's money? I mean users of the site do not pay anything, and something that large must cost a fortune to operate. But for the life of me I cannot figure out how come this FB has made it's founder one of the richest people in the US. At last count the company was valued at $50b. Yet as far as I know has little or no advertising. Sorry if this seems like a silly question but I just had to ask... :shuffle:

4rkidz
01-04-2011, 02:28 AM
I was just wondering how FB makes it's money? I mean users of the site do not pay anything, and something that large must cost a fortune to operate. But for the life of me I cannot figure out how come this FB has made it's founder one of the richest people in the US. At last count the company was valued at $50b. Yet as far as I know has little or no advertising.

the advertising for companies is linked to peoples profiles - unless people change their default settings about third parties all their info can be accessed which is why for those of us who do use face book daily - will find advertising on the side of the page that is related to their age/gender and also the groups they belong too.. multi million dollar advertising as instant access to millions of profile info..

rjblue
01-04-2011, 03:34 AM
Facebook has the most useful advertising on the internet. I see ads for places that are close by me, or that I might actually be interested in, rather than porn or viagra ads or big city ads for things out of my reach.

manleywoman
01-04-2011, 03:37 AM
What I can't figure out is hOw twitter makes money.

Prancer
01-04-2011, 03:40 AM
What I can't figure out is hOw twitter makes money.

Twitter doesn't make money--yet. They are building a potential audience first.

http://www.nytimes.com/2010/04/13/technology/internet/13twitter.html

manleywoman
01-04-2011, 04:40 AM
Interesting. So how many employees have they? How are they paid?

Erica Lee
01-04-2011, 04:44 AM
Twitter does now make some money via their "promoted" tweets and trends. Most of their cash flow for the instant still comes from investors.

Facebook makes money from Ads. I have spent close to $500 this past year on facebook advertising for various organizations and companies I am involved with. From an advertiser's perspective, facebook is fabulous. Not large budget advertising by any means, but because I can choose very specifically who I want my ads to appear to, even a small budget campaign can have an impact. I never know individuals or names, but I can be as specific as something like "women, age 18-30, who live in Toronto, have an interest in cats, and have friends who have liked the page 'Cats R Awesome'". Facebook gives me an estimate of how large of an audience my criteria encompasses and I have the option to add further criteria to narrow my audience, or remove criteria to widen my audience.

I've had more success with Facebook campaigns than general Google Adsense advertising (which appears mainly on the google search engine, but also many other pages.. including FSU) because of the ties to your personal information and just how specific I can be with who sees my ads.

This freaks some people out - but honestly, your privacy is never breached .... the companies advertising do not have access to any identifying information. And like rjblue has pointed out, you're much more likely to get ads you may actually want to see.

Another revenue stream for Facebook is "Facebook Credits" - the currency system used to allow users to buy things in (mostly) games. You may remember the (failed) attempt to get us to buy "gifts" for each other on birthdays, etc.... that flopped, but plenty of people are willing to pay $$$$ for credits to trade in for the super-awesome tractor in farmville or other such enhancements in games.

danceronice
01-04-2011, 04:39 PM
For facebook, the ads are also nice because ANYONE can make one, for a pretty reasonable rate, and you tailor it to the demographic you want to see it--ie, if I'm making an ad for my etsy store's facebook page, I probably am not going to target it to teenage males or people 65+.

However, it IS annoying that if your profile is set to "single" for relationship status, you WILL get neverending ads for dating sites, from the predictable (eharmony, match, plentyoffish) to the bizarre (I do not want to go to 'bigbeautifulpeoplemeet', nor am I the target demographic for 'blackpeoplemeet' because I'm not black!) About the only way to get it to stop is apparenlty to lie on your profile about relationship status.

bobalina77
01-04-2011, 04:45 PM
Yes I've noticed since I changed my status to engaged I get a lot more wedding advertisements, and since I've "liked" and joined as a fan to some baby Facebook groups I get some baby product advertisements as well. I don't mind.. some of them are pretty cool and I kinda like that they are tailored to my lifestyle.

KatieC
01-05-2011, 12:33 AM
I'm now feeling somewhat guilty because I never notice the ads on Facebook. Wouldn't have a clue what they are targeting me for! I'll look next time. I have been known as the most unobservant person in my group of friends. :)

genevieve
01-05-2011, 12:40 AM
I don't know if they still do this but you used to be able to delete an ad from your page and they'd ask you why - I checked either "Not interesting" or "Offensive" for them all :P

overedge
01-05-2011, 12:46 AM
I don't know if they still do this but you used to be able to delete an ad from your page and they'd ask you why - I checked either "Not interesting" or "Offensive" for them all :P

They do. And because my birthdate on FB is a lot different than my real birthdate (which is none of Facebook's business), I delete a lot of ads that suggest I should be booking my place in the nursing home soon. Sorry! "Not interesting"!

What I don't get is that my (real) city is listed in my profile, but because I have a lot of friends in another city, I continually get ads for stores, restaurants, etc. in the other city - which is about two days' drive away. Do they really think I will be so taken by a Facebook ad that I'm going to travel that far just to eat or shop there?