Facebook Revenue Model
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 $1.6 billion and net income of $500 million. 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
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 $1.6 billion and net income of $500 million. 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