Facebook today has become very successful with millions of people around the world in one big social network. Now, the interesting part is that Facebook does not charge any fees and for that specific reason, many more people are joining Facebook. This leads many writers and people to ask the question that everyone will probably ask, which is, “how does Facebook make money?”. Facebook made 4.27 billion dollars in 2011 doubling its revenue from last year. So, Facebook is not just making money, but is becoming a money making machine. Many rumors however, spread every now and then stating that Facebook will imply monthly fees on its users.
So, as mentioned above, the question, “how does Facebook make money?” is not too difficult to answer, and the truth is that Facebook makes billions off of virtual goods, advertising and applications. This is actually the biggest reason why Facebook will never charge users, because the more users, the more advertisement and the more Facebook become rich. As Facebook continues to grow, more companies are using it as the primary marketing tool allowing Facebook to become the number one social network in the world.
What is Facebook’s Secret to Making Money?
The secret of to this question, “how does Facebook make money?”, is simple and easy. It uses three main factors, which generate profit for Facebook, which are advertising, applications and virtual goods. Since Facebook has many people around the world, it has become a target for all companies promoting their products. Facebook is considered a marketing tool, where companies no longer concentrate strictly on TV, radio, and billboards, but use Facebook to reach their customers and others as well. However, if Facebook charged a monthly fee, it wouldn’t have had all a lot of users and therefore, it wouldn’t have become a marketing tool for worldwide companies to use.Facebook Advertising and how it Helps Them to Create Revenue
How does Facebook make money? The answer is that it is through advertising is easy. It charges fees on those advertising companies to place ads on their sites. Whenever there’s an ad on Facebook that promotes a certain product, Facebook takes a fee from that company to allow it to post ads. This is very helpful for companies, as they get a lot of feedback and responses from people using Facebook. Also, some companies have their own pages on Facebook, and if users click the “like” button, this allows the company to automatically send updates and promotions on its products, thus creating awareness and more users will be drawn to the company. So, in regard to this point, Facebook profits a lot.Facebook Applications are Key is Their Financial Success
Another factor that allows Facebook to make money is the applications. There are a lot of applications on Facebook that people use such as Zynga Texasholdem, Farmville and many other famous applications. All these applications have items that are usually purchased by gamers to give them advantage over others in the game. Facebook charges a rental fee from these applications, because they are using Facebook to generate their revenues. Virtual goods are also a way in which Facebook makes money. Facebook takes a profit from all the Facebook users who send virtual gifts to each other.So, as mentioned above, the question, “how does Facebook make money?” is not too difficult to answer, and the truth is that Facebook makes billions off of virtual goods, advertising and applications. This is actually the biggest reason why Facebook will never charge users, because the more users, the more advertisement and the more Facebook become rich. As Facebook continues to grow, more companies are using it as the primary marketing tool allowing Facebook to become the number one social network in the world.
