Is Facebook Profitable?

[Ahsen]

Hi,

I’m new in this forum and this is my first post.

While surfing I came across a discussion where some say Facebook is not profitable yet. How this can happen? According to them it sells stock to cover expenses. What do you think? Any idea?

[angsty_teen]

No they're not profitable yet.

They spend so much on keeping the servers running and really haven't even begun to try and maximize profit from advertising.

But if they do try to do so, we could see Facebook say bye bye in popularity as MySpace did because people get sick of spammy ads.

[Kuky]

That's why you use plugins like Ad-Block to keep that stuff from surfacing. ;-)

[automorphism]

I hate Facebook.

But it's a goldmine. Remember they have data, and the data they have is very valuable. They can compile lists upon lists of statistics about their userbase that can be invaluable for marketing.

[Kuky]

I hate Facebook.

But it's a goldmine. Remember they have data, and the data they have is very valuable. They can compile lists upon lists of statistics about their userbase that can be invaluable for marketing.

Bingo. It's pretty clear that they're doing some targeted advertising based on that data already. It's also clear-ish that they're trying to make it as un-intrusive as possible (i.e. instead of lame modal dialog popup with flashy ad, it's a low-profile thing that fits into the general frame of the facebook page). There's a good chance you won't even see it (kind of like google ads).

[automorphism]

Don't forget that they don't even have to advertise to the Facebook userbase directly to make their money. The data itself is valuable and can be sold for uses outside of Facebook, and since it changes daily Facebook could easily sell subscriptions. They probably already do, although I don't care enough to do find out.

[kuju]

I don't even mind the tageted ads.... that's how I found the apartment I stayed at in paris, at a CRAZY cheap price!

[Friend]

I did a calculation comparing Facebook's traffic and current earnings with some other smaller sites'. Their earnings far lower for the amount of traffic they are getting. The price paid for a share of Facebook by some investors are so much higher. As far as I know, considering the audience of the site unless they do some thing revolutionary its not a profitable business model.

[Rammstein39]

Im moving this because, while FB involves fam and friends, this has nothing to do with it.

[rodgerjones2]

They have lots of adds that are in applications and quizzes. Ads don't pop up without money attached to them.

Its estimated the sites worth 15 billion.

[AbnormalBob]

15 billion estimated worth isn't the same as 15 billion cash.