Facebook is an online social media and social servicing company based in America. It was started by Mark Zuckerberg on 4 February, 2004 along with fellow Harvard students and roommates Eduardo Saverine, Andrew McCullum, Dustin Moskovitz and Chris Hughes. The membership of website was only limited to Harvard students in the initial stage. In the year 2006 anyone who has completed 13 years can be the registered user of Facebook. In February 2012, Facebook held its IPO (Initial Public Offering) and at that time the value of the company was US$104 billion, the largest valuation to date for the newly listed public company! Facebook makes most of the money from the Advertisement that appears on the screen.

Facebook Revenue Model

In the year 2018’s FORTUNE 500 list of largest United States Corporations, Facebook ranked 76th. Facebook’s most of the revenue comes from the advertising. Facebook has generally lower Click Through Rate (CTR) for advertisements than most major websites. According to businessweek.com, banner advertisement on Facebook has received a 1/5th number of clicks of the whole web. A big part of Facebook’s pitch is that it is having so huge data, about its users that it can more efficiently target ads to those who will be responsive to the content. A small portion of revenue also comes from “Firehose” access, bulk access to the social media data sold to the third parties. Now, let’s find the entailed answer to the question “How does Facebook make money”

How does Facebook Make Money?