Raz Chorev | Socially Acceptable..
Advertising, Facebook, Social media

What’s Facebook’s Revenue Model?

2 months ago (today) Facebook was listed on the stock exchange, in one of the most anticipated yet disastrous IPO in recent years.

When Mark Zuckerberg created thefacebook at his dormitory room at Harvard University, 8 years ago, he wasn’t building a company. He was building a tool, allowing people to interact with their peers. There was no financial model, no revenue streams – it was a game.

Facebook became a little more than a game, when traditional  business people got involved, and based on their decades of experience in traditional advertising and media, found Facebook to be a gold mine – Millions of users = Millions of eyeballs to display advertising to.  Because that wasn’t the intention initially, it flopped almost as fast as it grew. The main flaw in that line of thinking, is very simple: Facebook users go to facebook to interact with their friends and socialise. Commercial messaging are overlooked and ignored, as this isn’t the natural place for them to be (as we grown accustomed to).

Moreover, almost half of Facebook users are accessing Facebook via a mobile device. The mobile apps aren’t configured to display advertising. Almost half of Facebook users (at time of writing) – 425 Million users – are accessing Facebook exclusively via mobile. No advertising is served to them. HALF!

Without going into the discussion about the future of advertising as an industry, this infographic tries to paint the picture, explaining the volatility of the social media space.

Facebook: Programmed for Disaster

 
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