Friday, November 11, 2011 1:15:07 PM
So how does Facebook give away free accounts and make money? Ever seen ads on your Facebook homepage? Yes, that’s where the mystery lies- advertisements. Facebook generates bundles of cash through its ads. You wanna promote your business, wanna reach to millions of users, just create a Facebook ad, get millions of views, and just pay them a little. Facebook is intelligent, if you have mentioned that you are a fan of Adidas, then you probably like sports. Ads related to sports will start showing up. Which ad is shown to which user depends on the likes and dislikes of that person’s data saved on the profile.
Another way Facebook makes money is to send a virtual gift! The “send a gift” option is a big incentive for those who want to send a virtual gift to their friends and family. The revenue goes to Facebook!
One of the most important methods of generating revenue is through the different applications which sell through the Facebook platform. Take ‘Farmville’ for example – a game launched on Facebook which allows users to maintain their virtual farm. The parent company, Zynga, is getting a lot of traffic through Facebook. Of course, Facebook takes a ‘rental fee’ from the revenue generated by the game. Companies like Zynga increases their user base, and Facebook eats a slice of their pie.