Financial Value Of Facebook

1147 Words 5 Pages
The three critical issues above are the key drivers of financial value for Facebook. Facebook may be free to use, but its revenue has more or less doubled every year since 2007, and the founder is now a billionaire. The key question then is: how does Facebook make money? Facebook makes most, but not all, of their money from one source: advertising. Facebook advertisements brought in $300 million in revenue in 2008, $500 million in 2009, and about $800 million in 2010. Facebook offers two types of advertisements: self-service ads and engagement ads. The first type are fairly simple: they consist of a title, picture, and a bit of text, and the user can click the link or "like" the advertisement. Engagement ads are more complex; they allow for …show more content…
They have been developing tools to assist in the spread of this vision since the introduction of the Open Graph in 2009. Now, with over 10 social plugins available to the public (and free of charge), website owners need to decide how best to utilize the available tools for their businesses. Facebook for websites is a powerful tool that businesses have used to grow their businesses. The average media site integrated with Facebook has seen a 300% increase in referral traffic. The research to date has pointed to the fact that Facebook integration helps drive traffic to websites and pages, as users interact with sites and increase the earned media” of a brand (in other words, the mentions and exposure of branded content that the company didn’t pay for). Even though businesses use this tool, it is doubtful how much money Facebook attracts by making this social integration platform available. On the other hand, Facebook platforms which provides a framework for software developers to create applications that interact with core Facebook features. The company 's effectiveness regarding mobile advertising and its success in new platforms have allowed the social media giant to surpass investors ' expectations continually. Facebook is particularly skilled at bundling services for both mobile and non-mobile platforms. The company is so effective at bridging the gap between mobile and non-mobile platforms that the distinction between the company 's efforts in each area is described as moot. Daily active users for September 2014 were 864 million on average, representing a 19% year-over-year increase. Mobile daily active users for September 2014 were 703 million on average, representing an 39% increase year-over-year. As of November 18, 2014, the company had a market capitalization of $207.25 billion and a massive 1.2 billion total users worldwide. Going

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