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The problem is that Facebook's primary asset is users. They're making money off of them(approximately $1/user in profit and $3.5 in revenue), but it's not clea
by cube13 14y ago
The problem is that Facebook's primary asset is users. They're making money off of them(approximately $1/user in profit and $3.5 in revenue), but it's not clear if they can make exponentially more per user.
They certainly can't expand the user pool by that much, which means that they need to find a way to monetize their existing users more effectively. I think that Facebook can certainly make more/user than they currently are. $5, maybe $10/user is possible. But $100? I don't think so.
- marshray 14y agoHard to imagine exponential growth in what either users or advertisers are willing to pay. An analogy to FB as a user service might be, say, MMORPGs like WoW. They seem to exhibit early exponential growth due to peer pressure. Yet they are never priced more than $10 - $15/mo. Often they start out as a subscription service and then move to free-to-play. So then are advertisers willing to increase their FB advertising budgets exponentially? Does FB have something coming down the pike on a regular basis to make that happen?
- sanxiyn 14y agoVirtual goods. It is a proven revenue model for social networks. http://venturebeat.com/2009/03/19/the-worlds-most-lucrative-social-network-chinas-tencent-beats-1-billion-revenue-mark/ http://venturebeat.com/2009/03/19/the-worlds-most-lucrative-...
- Drbble 14y agoNetflix makes over $100/user/yr of revenue. Why couldn't Facebook?