Wednesday, December 21, 2011

How Facebook Makes Money

If you're wondering how Facebook makes money the answer is pretty simple - Ads. Facebook has been very open about this and has also got a new public blurb on all users profiles, which says 'Ever wonder how Facebook makes money'. When you click on the link provided, you get to see a little bit about how Facebook ads work. Some of the notable things mentioned in their write-up is that each ad created is meant for users that relate to it in some way or the other. Like is there is a local gym opening in your neighborhood. Then the ad will be shown to you and your pals who stay close-by. So when you click on one of these ads, Facebook makes money. If you do not click on these ads then Facebook will not be making so much money.  We think that a little money is also made when you view the ad. Unlike TV ads where you have no control of the ad and are forced to view it or switch channels. Facebook ads come with a (x) mark, click on it and the Ad is gone.

Pretty straight and simple, Facebook makes money through it's Ad platform. No ads no Facebook. yes the service  is free but to run such a large site along with the talent that is needed, takes a lot of money Facebook says and therefore ads are necessary to keep the service free.

Facebook has made this announcement ahead of the news that users are going to see 'Sponsored Stories' in their news feeds starting early 2012. These Sponsored Stories will be here to stay and there will be no (x) mark next to them. These sponsored stories will appear in your news feed and no more than one a day will be shown. These will usually be stories that are related to your friend's likes and have already been interacted with. So in addition to appearing on your news feeds these stories might appear in the ads section on the right-hand side. Wondering whether these ads will appear on your Timeline. As of now Facebook has not said anything about the Timeline. So for now it is safe to assume that your Timeline is not going to carry any in-line ads.

Source: Facebook
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