Facebook Revenue and Resources

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Most of Facebook's revenue comes from advertising. These advertisements are displayed in the sidebar of most pages of the site and they’re typically targeted to certain users. Some of the ads displayed are sponsored by major brand advertisers and some come from Facebook’s capabilities to target its users. Facebook is able to customize the ads based on the user’s metropolitan area, age, gender, school network, job, and even relationship status. Facebook also makes money through Facebook credits, applications, and virtual gift shops where users can purchase, send, and receive items to and from each other. Overall, the amount of information and way that users share that information is making Facebook lots of money. Facebook’s key resources for competitive advantage are network effects and switching costs. Facebook’s size and recognition is huge. It connects people, organizations, networks, and applications all in one place. Facebook leverages network effects by having so many features and applications that are complementary to their service. This adds value for its users without Facebook doing anything. These resources make it extremely difficult for any firm to steal market share by trying to copycat their site. The “dark web” serves an asset to Facebook. Facebook is public and private at the same time. Sites that can’t be indexed by Google and other search engines are referred to as the “dark web”. It’s a valuable asset because this information is only available to Facebook’s network. If they are able to utilize their own internal information along with external data from search engines, Google could have a problem. I also think this is an asset to Facebook for privacy and security reasons. The dark web protects users from search engines being able to disclose their social media. The average person doesn’t walk around in their day-to-day life advertising their full name, age, location, marital status, or who their friends are....
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