the person who laid the foundations for it.So, at the beginning this social networking site was only accessible to allHarvard students and since September 26, 2006 “facebook” has been availablefor everybody of ages 13 and older who had a valid email address.
• Where does the money come from?
Today’s valuation of Facebook is increasing to about $50 billion.But how comes that “facebook” is so profitable although it is free for all users?First of all, “facebook” got some funds from so called angel investors. That’s why facebook has a current market value of approximately $50 billion.But the fact that Facebook isn’t listed at the stock exchange so far makes itquite difficult to get proper information about the statement of Facebook’sfinancial condition. The company avoids joining the stock exchange to keeptheir financial statements a secret. The company also doesn’t want to share how it earns its money.Financial sources are:E-commerceApplicationsAdvertising
One way of how Facebook comes to its money is the E-Commerce. So, all thevirtual gifts one can send each other, like birthday cakes, hearts or otherthings.Sometimes these gifts are free, but if not, they generally cost users $1 each tosend. And the same with games like FarmVille, CityVille or MafiaWars, wherethe user can buy extra objects such as several animals, buildings, tools etc.
Another method of Facebook how to earn money is the platform wherefacebook allows developers to build their own applications and integrate theminto Facebook’s Application Platform. These applications range from IQ tests, to games (such as FarmVille, CityVilleetc.) and Facebook gets a piece of the profit the developers make from thoseapplications.
Facebook Advertising is one of the most effective marketing tools available forcompanies today and it is Facebook’s largest source of revenue.Since 2007 they use a system to drive relevant and interactive ads to theirusers.Unlike other websites, advertising on Facebook is available to anybody. Thismeans, that not only large companies have the opportunity to advertise onFacebook. Furthermore the advertisers are able to specifically limit the targetaudience to make sure the ad is seen by the most relevant audience. Forexample, the advertisement can be targeted by age, gender, location,workplace or school and even relationship status. (That’s the reason why there