How does Facebook make its profits?
Facebook is a social networking site that makes it easy for users to communicate and share with family and friends over the Internet, and it was created in 2004 by Mark Zuckerberg while he was attending Harvard University. He is over 13 years old, and he has a valid email address to join Facebook. Today, Facebook is the largest social network in the world, with more than a billion users around the world.
How does Facebook make money?
Facebook achieved revenues of $40 billion in 2017, most of which came from digital advertising, which brought in $39.9 billion. On July 25, 2018, the company announced the results for the second quarter of the year, which achieved profits of $13.2 billion, an increase of 42% compared to the same period. Same from last year.
Ads
Facebook emerged as one of the companies that dominated the digital advertising space that enables advertisers to display ads based on searches made by users, and here are some of the types of ads that enabled the company to reap its huge profits:
Targeted Advertising
Advertisers can use personal data about users from Facebook for advertising, they can segment and target those users and promote their brand by showing them ads tailored to them based on gender, religion or political affiliation, and advertisers pay Facebook to get their products to customers The right ads are called targeted ads.
video clips
In the future, Facebook is preparing to expand its sources of income through the field of video publishing and live broadcasting (Facebook Live), where the daily viewing time for live broadcasts has increased four times compared to 2017, in addition to creating video ads on the Facebook Live broadcasting platform. Facebook has also signed business deals with other video content makers such as Buzzfeed and Vox.
Message ads
Another area of continued growth in Facebook is the messaging service through the (messenger) application, which recently began displaying ads, and direct messages enable users to chat directly with companies, as more than 2 billion messages were exchanged between users in the fourth quarter of the year. In 2017, Facebook developed its influence in the field of messaging and chat, as in 2014, it purchased the Whats App application (Whats App) for $19 billion.
Facebook on mobile
In 2016, the Facebook mobile application generated 83% of ad revenue, making mobile the largest digital tool for the money industry, as Facebook continues to explore new advertising platforms, but expectations are that mobile advertising will bear the burden The company’s revenue is growing at a double rate.
Self-serve advertising
This type of advertising is widely used on Facebook where self-serve ads allow anyone to create and display an ad on Facebook, and these ads appear on the right side of Facebook pages, and the Ads Manager page helps advertisers to Create their own ads and provide targeting tools to Facebook users to ensure that the ad reaches the target audience.
Apps and Games
Facebook has a good ability to raise funds from multiple sources of apps and other sites connected to it, each of which contributes to the company’s profits or is expected to do so in the near future:
Facebook Payments
This activity generates money through payment processes such as peer-to-peer payment systems such as Venmo.
Jibbigo App
This app allows conversations to be translated into different languages, thus enabling companies to advertise their products in several languages as a great attraction in both the digital and global economy.
Atlas Solutions
Atlas, which was purchased by Facebook in 2013, enables advertisers to effectively monitor their social media platforms.
Purchased in 2012 for one billion dollars, this application has 400 million users, and is expected to be a huge primary driver for Facebook in the burgeoning digital market for photo applications.
Whats App
Purchased for $19 billion in 2014, making it the largest acquisition the company has made in recent years. This application is a very popular instant messaging platform that advertisers love, due to its widespread use not only in the United States, but Also around the world, Facebook is promoting a new business model that charges advertisers a fixed price to connect with customers of this app.
Games and in-app payments
In 2017, Facebook earned $711 million in paid services such as in-app purchases of desktop games.
