Facebook and Money

It’s been just over a half decade since Facebook’s launch and yet the social networking site has five headquarters stretched across the globe to serve over $500 million current active users from all walks of life. So I couldn’t help but wonder how much revenue this web giant generates and where from.

In 2009 Facebook’s revenue amounted to about $700 million from four primary sources centered around advertising. The biggest source is performance advertising which involves interactive banners such as FarmVille, social games etc. which offered about $350 million.  Brand advertising along the website’s side banners has grown sharply to nearly $250 million as more users translate to more commercial’s worth more money. The Microsoft sub-advertising sect alone added another $150 million and virtual goods (gifts) translated to a real $20 million.

All-in-all $700 million is comparatively small for a website second only to the Google empire which through its search engine and subsidiaries such as YouTube, amassed over $23.6 billion in 2009. Nonetheless, Facebook has much potential considering it is 7 years younger than Google, still only requires less than a tenth of Google’s current staffing, occupies a still unfulfilled niche and is almost doubling in revenue every year with next year forecasted at $1.1 billion.