Facebook: A place for revenue
Facebook board member, Marc Andreessen projected that Facebook would top $500 million in revenue for 2009; also, eluding that it could very well become a billion-dollar company within the year.
Namely, the reason for this sudden jump in revenue is because of Facebook’s transition into Social Ads over banner ads. These new ads target users with keywords in their status messages, profiles, etc, and gives the users the ability to “like” or “dislike” an ad; ergo, creating more precisely targeted ads to Facebook patrons.
A secondary source of income came from their “engagement ads,” which are ads with which users can interact, comment or send as a “gift” to their friends. Different companies sponsor these “gifts”, or users can pay for other more generic “gifts” – creating a virtual world of chatkas and sentimental gifts.
Facebook has really become the thought leader and innovator of advertising through social media, and they are one of the first social media networks to really figure out how to turn a [dot]com into a profitable and self-sustaining machine.
Because of this, and many other solid and profitable tools that Facebook has developed they “are definitely in no rush” for an IPO. “If you don’t need that capital, then all the pressures are different, and the motivations (to go public) are not there in the same way,” said the 25-year-old CEO, Mark Zuckerberg.
And Zuckerberg is certainly under no pressure to raise outside capital, since they just turned $1 billion in revenue, last year; up $500 million from Andreessen’s estimates.
Facebook certainly has a solid chance of turning into the next Google-esque cash cow. Time to start buying up some private shares!!