Reviewing Facebook’s Revenue Making Techniques

Thursday 16th, February 2012 / 11:00 Written by

On one hand, rumours about Facebook shutting down flooded  Facebook pages. On the other, Facebook is deploying all possible techniques to improve its revenue. Starting from Ad Preferences on the side of the profile page to the latest compulsory ‘Timeline’, Facebook is all set to improve its revenue. Already, Facebook provides users with sponsored stories which their friends have read and liked. Moreover they display ads based on your likes which you may not even be able to opt-out from. While these are the existing strategies that Facebook has deployed already, the new feature that could boost the revenue of Facebook is placing of ads in the news feed of mobile users.

 

Out of almost 1 billion users on Facebook, nearly half of them access it through their smartphones, and this number is increasing. This statistics led to the new ad placing feature of Facebook. While placing ads on the news feed of  smartphone users could vastly improve  revenue, it is a menace to the users: displaying ads could degrade the performance and speed of access through smartphones.

Already Facebook has filed a monstrous $5 billion public stock offering thus making it the 6th largest IPO in US history and the 15th largest IPO in Global history. Moreover this $5 billion is just the initial fund-raising target, sources from Facebook say that this amount will be increased gradually based on demand from investors. At this rate Facebook may soon overtake Google, McDonald’s and Boeing, thereby trailing behind only Apple. While these are possible threats to commercial companies like Google & Twitter, what could bothers users would be the annoying ads which could be placed forcefully in our news feed. Facebook users generally don’t take kindly to changes made, especially now with the new news feed that’s more focused on the ‘Timeline’.

Facebook has gone one step ahead of  other social networking sites by reportedly working to launch a new smartphone in conjunction with HTC. The main question, if a ‘Facebook Phone’ is launched, would be this: would you buy it? The idea of a ‘Facebook Phone’ sounds great but that doesn’t necessarily mean that users would prefer this over the iPhone &  Android Phones. Mobile users, especially those using smartphones, would prefer a device that supports multiple services and functions and would not be limited to services provided by Facebook.

Apart from this, the major revenue would be from ads as mentioned earlier. These ads are going to occupy a large part of your timeline. This could dominate your news feed on your mobile device, especially with the limited real estate available.  This would be  beneficial to Facebook since the news feed is the first thing to be loaded when you access Facebook through your smartphone, but could be a major gripe for mobile users. However, we will only know what Facebook has in store for mobile users when Facebook launches this new revenue generation model. It is pretty obvious that this would be  a bane for Facebook’s mobile users and boon for Facebook. Lets keep our fingers crossed and hope for the best because what we need is less annoyance and more fun from Facebook.

 

(Image Credit: Techwek)

About the author

Deeptaman Mukherjee is one of those rare names in the Indian blogosphere, who pursues blogging as his hobby. In the 4 years of his blogging experience, he has worked with some of India's top blogs. He presently blogs at My Portable World and Tech Buzz Online. For any engagements or just to say a Hi, do get in touch with him at Twitter & Facebook. Know more about him, here.

View all articles by Deeptaman Mukherjee

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