Why is Facebook worth billions?

[christiane]

I finally got around to seeing The Social Network a few days ago. I am not a Facebook user, but still found the movie very interesting.

It made me wonder how a website that does not sell advertising space is worth billions. I did some research online & found a few articles about it, but they didn't really give a clear explanation.

Does anyone know?

 

[Geoff_M]

I finally got around to seeing The Social Network a few days ago. I am not a Facebook user, but still found the movie very interesting.

It made me wonder how a website that does not sell advertising space is worth billions. I did some research online & found a few articles about it, but they didn't really give a clear explanation.

Does anyone know?

...Facebook does sell advertising.

 

[SaraJayne]

Facebook has ads all over it...which is why an ad blocker is a great thing.

 

[christiane]

It does? Sorry, I guess I should have asked one of my friends who Facebook before I posted!

During the timeframe of the movie, Zuckerberg was portrayed as being against advertising and said there would be none on the site. And even during that time, the company was worth a lot of money.

 

[Kimberly]

It does? Sorry, I guess I should have asked one of my friends who Facebook before I posted!

During the timeframe of the movie, Zuckerberg was portrayed as being against advertising and said there would be none on the site. And even during that time, the company was worth a lot of money.

More or less marketing potential at the time. Facebook is quite literally a marketing gold mine because you have everyone's likes and dislikes on one site, in one place. However, facebook's revenue is based on their growth, especially with capital investors looking for payouts relatively soon.

If I were Mark Zuckerberg, I would have sold the site a few months ago. Their whole strategy right now is based on growth... and you're going to hit a limit sooner or later.

 

[DisTeach1]

I feel Facebook's time is limited...and that it's growth has reached a peak. I know myself and many adult friends have grown tired of it, and I know college students who have deactivated their accounts. Once the younger set (high school and jr. high) get tired of it, it's history. Just like MySpace. No one even talks about MySpace anymore.

 

[FireDancer]

Keep in mind that the movie is fiction. There are little pieces of fact in it but it is not the actual story of Facebook or Mark Zuckerberg.

Facebook is worth so much primarily because of the treasure chest of detailed information the users give it. Depending on how Facebook evolves it has the potential to be a portal to 3rd parties, much like it currently is for social gaming, and Facebook will be almost a social wrapper for that content.

Of course it could also crash and burn. Only time will tell. When I was showing Google to my friends in 2000 I would have never guessed they would one day be on their way to becoming the most powerful company on the planet.

 

[Agri]

In addition to what everyone else has said, facebook has games! You've got thousands of people checking in everyday to play games many times a day. They're spending money on those games and seeing zillions of ads in the process.

It's sort of like asking why google is worth so much back when they were just a search engine.

 

[NotUrsula]

As FD said, the value is in the data. FB knows a whole lot about the likes and dislikes of the most valuable marketing demographic: 18-45 yo's with money. Not just Americans, either; the membership is worldwide, and the granularity of the data is nearly infinite. That information can be sold for quite a lot.

 

[bicker]

And even if your contact information will not be used for sending you marketing materials, they can be used to correlate your personal information with customer databases, from sources where no such promises were made, essentially adding the great value to other, existing marketing resources.

 

[tvguy]

And even if your contact information will not be used for sending you marketing materials, they can be used to correlate your personal information with customer databases, from sources where no such promises were made, essentially adding the great value to other, existing marketing resources.

Very true. I am surprised that so many people don't realize how much information about them is, and always has been public information. The internet just made access easier.
Your political party, home address, how much you paid for your house, how much you pay in property taxes, you arrest record, every court case you have every been involved in, all public informaiton.

 

[SaraJayne]

Very true. I am surprised that so many people don't realize how much information about them is, and always has been public information. The internet just made access easier.
Your political party, home address, how much you paid for your house, how much you pay in property taxes, you arrest record, every court case you have every been involved in, all public informaiton.

My political party isn't public knowledge. Well, at least in public government records.

 

[tvguy]

My political party isn't public knowledge. Well, at least in public government records.

Well, if you are a registered voter, it is public record. So no, if you aren't a registered voter, it isn't public record.

"Is my voter registration information public record?
Yes, portions of your registration are public record. Your name, address, party affiliation and year of birth are public record. Your signature, drivers license number, social security number and month and day of birth are confidential."

 

[wvdisluv2]

Eh~If it's the worst thing that ever happens to me...I'll be ok lol
Wait...I don't care who knows my political party, my home address (rural route in WV), I rent, don't own, so no property taxes and *knocks on wood* no arrest record or court cases I need a more interesting life

 

[Big Cuddly Bear]

I actually advertised on facebook for 2 months on a CPC basis. I had about 25 clicks, but zero results. So then I created a different ad..... same results...

 

[bonoriffic]

R.E.M released their first single from their upcoming new album to Facebook. They didn't put it on the radio, or go on TV. Facebook. One click and one of the biggest bands in the world reached a global audience millions of times bigger than any marketing campaign could ever reach. 1 second, at a cost of nothing, and you had more people hear your music than millions of dollars and weeks of publicity the old way. That is why Facebook is worth billions.

 

[Big Cuddly Bear]

R.E.M released their first single from their upcoming new album to Facebook. They didn't put it on the radio, or go on TV. Facebook. One click and one of the biggest bands in the world reached a global audience millions of times bigger than any marketing campaign could ever reach. 1 second, at a cost of nothing, and you had more people hear your music than millions of dollars and weeks of publicity the old way. That is why Facebook is worth billions.

OK, that's been a stretch for about 15 or more years, now.....

 

[Tony-NJ]

Data.

 

[bonoriffic]

OK, that's been a stretch for about 15 or more years, now.....

I didn't say they were U2. But in the past 15 years any band that puts out 6 albums that go #1 in multiple countries each time counts as being a big band. And this is during their "down" years. Very few bands can claim that kind of global appeal.

 

[Becky2005]

...Facebook does sell advertising.

BINGO!!! I was hmm...Facebook does do advertising and amazingly enough it's pretty good too.

If you have a page you want to advertise, you can pay by how many people click on it, etc.... I do a fundraising pageant so our first year thought "eh, why not" since you set the limit as to how much you want to spend. I wasn't expecting much of anything and was surprised in a good way. I think for our advertising dollars Facebook actually was the best return at least to get people to even know we exist.