[IT Note] Facebook: Profit model

[IT Note] Facebook: Profit model

 

How does Facebook make money?

 

Facebook has 10mil business owners and 3.1bil users, and there are Facebook ad platform to make 86bil revenue and 29bil net income as 34%.  It is so profitable.

 

Facebook makes money primarily through advertising revenue. Businesses can create targeted ads and promote their products or services to specific groups of Facebook users based on demographic, interests, behaviors, and other data points. Facebook charges businesses based on the number of impressions or clicks their ads receive.

 

Apart from advertising, Facebook also generates revenue from other sources such as payments and fees from game developers, Facebook Marketplace transactions, and other services.

 

Facebook's vast user base, which includes 3.1 billion monthly active users, and its ability to collect and analyze user data, makes it an attractive platform for businesses to advertise on. Additionally, Facebook's ad platform is highly sophisticated, allowing advertisers to measure the effectiveness of their campaigns and make data-driven decisions.

Overall, Facebook's advertising revenue has been the primary driver of its financial success, with the company reporting $86 billion in revenue and $29 billion in net income in 2020.

 

 

Facebook: Profit model

 

 

 

The apple has blocked the Ad platform from this year, and it will cause critical damage to Facebook profit model.  So Facebook is trying to evolve new metaverse business, but I am not sure it can build sustainable profit model in very near future. 

 

Facebook has operated social ad based on web or mobile platform, but mobile platform are managed by Apple & Google, why will they allow Facebook model under their platform?

 

Maybe, it will be more reasonable to be a content provider or a solution provider instead of new frontlinier with  metaverse, because metaverse seems to be another 'second life'.   'second life' were launched by Linden Lab about 20 years ago, and it was so sensational, but it seemed to be failed.   

 

Facebook should review why did 'second life' fail seriously ?

 

Second Life

 

It's true that the concept of a metaverse has been around for a while, and platforms like Second Life have been available for many years. However, the technology has evolved significantly since then, and the idea of a fully immersive and interconnected virtual world is becoming more and more feasible. There is a growing interest in the metaverse among tech companies, investors, and consumers, which suggests that there may be significant opportunities in this space.

 

That being said, it's important to note that building a successful metaverse platform is no easy task. There are many technical, social, and ethical challenges to consider, and it's possible that some companies may not be able to overcome these challenges. Facebook and other companies will need to invest heavily in research, development, and user testing to create a platform that is truly compelling and sustainable.

 

Regarding Second Life, it's true that the platform didn't achieve the level of success that its creators had hoped for. However, it's important to note that Second Life is still active today, and there are many users who continue to find value in the platform. There were certainly some issues with Second Life, such as a steep learning curve and a lack of direction for new users, but it's also possible that the platform simply wasn't able to capture the interest of a wider audience.

 

In conclusion, while there are certainly risks and challenges associated with building a metaverse platform, there are also potential rewards for companies that are able to create a compelling and sustainable product. Whether or not Facebook will be successful in this endeavor remains to be seen, but it's clear that there is a growing interest in this space, and there may be significant opportunities for content and solution providers as well.