How does Facebook make money?

A look at various ways Facebook makes money through advertisements, send a gift services and also selling virtual rewards for real money along with being a hit with investors.

We all know Facebook has a massive user base with over 300 millions users being regular visitors every day. Facebook is the largest, biggest and probably the most envied Social networking website in the world. Also very interesting unlike other social networks it has not been acquired by any other big fish.

So that warrants a question which is how does Facebook make money?

  • If Google can sell ads in the form of sponsored links and Adwords why can’t Facebook? Facebook surely does earn money by selling advertisement real estate. It is often done in a targeted way as Facebook knows what we like thanks to their “Like Button“. 😛
  • Selling Gifts on Facebook which users can send to their friends. This also is a way to make money for Facebook.
  • Selling virtual rewards on gaming apps like Mafia and Farmville. There are addicts to pay real money to buy influence and rewards points. Much of this money might go to the app developers but I am sure some of it trickles down to Facebook.
  • Finally Facebook also attracts a lot of investors who invest in the company to keep growing as there any with great potential always attracts a lot of money. But such investors are usually who will bail out at some point of time or the other.

So these are the ways Facebook makes it’s money. I do not think it is a lot that they generate but must be a decent amount as most people still expect Facebook to keep growing and earning revenues. It also turned down an 1 $ Billion offer from Yahoo as it was confident of earning enough by itself without compromising on its independence.


Sanjit Chohn May 10, 2010

their Main Source Of Income Might Be Investors In their Shares and Bonds. 😉

Aditya Kane May 11, 2010

not sure about it. But if investors are the main source of income then facebook will be up for sale as that is how it works with investors.

Anterpreet May 10, 2010

Great, Facebook has slowly turned into a super money making machines, all bloggers can learn a lot from FB 🙂

asif May 10, 2010

Well, Facebook is worth $15 Billion. Mark Z alone has Around $2.5 Billion Stakes in Facebook.
As per their monetization. They Sell Ads shown in the right column of every facebook page, its very targetted as Facebook has all the data like the Age, Sex, Location, Interestes, etc of every user. Facebook also has a marketplace for apps. It makes enough from Advertising Alone.

Aditya Kane May 11, 2010

It is not how much it is worth. Twitter is also worth over a billion dollars but it makes almost zero revenues. This means it will be sold someday to another company. Facebook has some revenues coming in but nothing to suggest that they make big profits compared to what it takes to run Facebook.

hacker9 May 13, 2010

and also previously facebook used to use google adsence to make money.

Jessica April 28, 2011

This is how facebook make money buy doing better than google and google adwords program. Facebook have lower cost ppc. People always said go for the big fish in the pond not the small fish and that’s what Facebook is doing. I hope everybody jump in on this bandwagon because Facebook has all the traffic you want.

shree January 20, 2013

I also heard that fb also earns some amount through its daily login, logouts etc…Is it true??