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Facebook Revenue Model

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FACEBOOK SUBMITTED BY: NEHA CHOUDHARY ABOUT FACEBOOK: This is the era where technology leads to innovation and internet serves as the lifeline of various business processes across the world . Facebook today has become a synonym for people across the world to connect with others and share their thoughts and ideas. THE CASE: Shareholders passed a resolution asking to generate revenues from the increasing user base. The charge could be some monthly fee or from a new unit being added. The latest revenue of Facebook is quoted as .

6 billion and net income of $500 million.

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The company is planning to go for an IPO in near future and also the valuation of the company is $100 billion. THE APPROACH: To formulate a plan the following factors have to be kept in mind: • The demography of the users and the time spent on Facebook • Utility derived by the users from Facebook • What factors or features would justify charging a user THE CURRENT REVENUE MODEL: Facebook currently earns its revenue from the following sources: • Brand ads • Facebook’s ad deal with Microsoft • Virtual goods • Self-service ads THE PLAN:

Charging customers for something which they have been habituated to using for free is a challenge in itself.

The most immediate and instant reaction which comes is that they repent from availing the facility. In a world of cut throat competition losing customers may bring a halt or downturn to the growth path of a company. In this case the most critical factor to be considered and thought of is that when a customer is availing a service free of charge why would they suddenly start paying for it until and unless they are provided with some facilities with added benefits to them and ads on to their utility from availing the service.

The revenue of the company can be increased by following a two face approach: • Charging the users • Charging the commercial bodies. CHARGING THE USERS: • The users can be charged through the following features: o PROFESSIONAL PROFILES- Today Facebook is not just a medium of interacting and socializing, with the huge number of users and their data base it can help its users in searching for jobs on Facebook itself. The plan would be to help them make their professional profile which would have the relevant information for potential employers who can check those profiles.

However making such profiles would not be free of cost, we can charge the users on having such profiles. The profile would have the following attributes: ? NAME ? STATUS-EMPLOYED/UNEMPLOYED ? EDUCATIONAL BACKGROUND ? WORK EXPERIENCE ? QUESTIONS OR OPNION SPECIFIC TO THEIR QUALIFIACTION (They would be asked questions and they themselves can update on their walls with their educational background relevant area. This would help the employees identify the correct match for their job) TALENT HUNT : The idea behind this would be to have a weekly or monthly forum of activities depending upon the initial response, wherein one specific area of talent or creativity would be focused on. For example One month could be dedicated to photography and the users would have to upload their best shots which would be judged on the basis of the no. of likes and other criteria and would be given prizes by the companies sponsoring such contests. And who knows these talents may get recognized and people may get an opportunity to earn their living from their talent.

To participate in such contests the users will be charged. There would be a page attributed to these contests wherein the users would upload their work ? CHARGING THE COMMERCIAL BODIES: A large chunk of the company’s revenue is generated through the ads put by various Companies. In order to drastically increase the revenue the commercial bodies needs to be targeted as well. The various features or benefits which can be given to the companies are as follows: ? COMPANY PROFILE – This would include companies having their pages where they can regularly update about their products and offers through teasers, videos.

Also customers using the company product can give their feedback on the company pages which can help the company attract customers. And they can be charged for providing such facility. ? DATABASE: – The large database which Facebook has through the professional profiles of its customers can also be used to generate revenues. One of the ways can be by providing relevant data of the users to recruitment companies. OTHER WAYS TO GENERATE REVENUE: ? SEARCH ENGINE: Facebook would add its own search engine which would help the users socialize and also make use of the search engine as and when they want to.

This search would help Facebook earn by the number of clicks on any company website outside Facebook via Facebook. ? FACILITATE GROUP BUYING AND SELLING: This feature would help companies selling their product and services in bulk. For example: A travel Agency wants to sell a package for a tour for around 20 – 30 customers Facebook would pass this information to a selected demography of users would individually choose the package if they want to but would get discounts in a group.

Facebook will charge the companies for every deal done via Facebook. The purpose behind all the features mentioned above is to make Facebook one stop shop with added fun and entertainment. These features would create a very high dependency of the customers towards Facebook and would increase their exit cost in terms of inconvenience. These approaches are not the end of options for Facebook they are some of the drops of the ocean of solutions.

Cite this Facebook Revenue Model

Facebook Revenue Model. (2019, May 02). Retrieved from https://graduateway.com/facebook-revenue-model-1210/

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