Facebook, a company that has grown to be one of the biggest companies today, not only in the IT department, but all over the world, hit $900 million in revenue, during one of the countries worst economic recessions. A major question that has sparked many Facebook users is how they make money, and what drives revenue growth in this company. Believe it or not, Facebook makes money through the advertisement world. The advertisements that exist on the sidebars of each Facebook page have a list of advertisements. These advertisements are referred to as “Facebook ads.” Many companies pay Facebook a large fee, to put there companies advertisement slogans on their page, since Facebook has grown to have millions of users per day look at this wonderful opportunity for other companies through advertisement. Facebook is a free service, since the company generates majority of their money through these advertisements.
Why is Facebook advertisement different from good advertisement? The unique thing about Facebook is that it gives the advertiser a way to target people that are interested in what have to offer. The way the advertisements work for Facebook are one of a kind. The Advertisements are placed on your Facebook page based off the interests that you list in your profiles. A problem with this, is that many Facebook users are arguing that this goes against their rights, since Facebook is accessing their personal information.
Now a major problem with Facebook, since it is a free service company, is that there are many rumors swirling around that the company is going to start charging people to use Facebook. The good news, is that this is just a rumor, however, if this were to happen, this could potentially be the downfall of Facebook. Let’s hope that this does not happen, as it would be a tragic, and unnecessary action for Facebook. They are doing great just the way they are right now.
http://www.associatedcontent.com/article/1906792/how_does_facebook_make_money_pg2.html?cat=3
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ReplyDeleteIt's pretty incredible how much revenue Facebook generates annually, solely through advertisement sales. I agree with you, regarding Facebook and "the rumor". If Facebook were to unnecessarily make their users pay a fee to use the site, Facebook would fall drastically down the social networking totem pole.
ReplyDeleteI would think that this is very true for other websites in the industry in terms of revenue generation.
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