Facebook's quest to grow revenues apace with membership
How will Facebook continue to grow revenue going forward?
Gartner analyst Andrew Walls said advertising may be eclipsed by applications that run on the social networking platform. Down the road, Farmville and other applications will flourish, he said, and Facebook will benefit from its slice of proceeds that come from them.
Salesforce.com, for example, began as a cloud-based provider of software that allows businesses to interact more efficiently with customers. But it soon became a platform for other applications for the business market.
"There is great potential in third-party applications," he said.
Harvard Business School professor Ben Edelman said Facebook will continue to test user's comfort levels on how much information they want to share with others on the Web, including publishers.
"We've reached a tipping point where Facebook has become the defacto social platform and there really isn't an alternative," he said. That gives the site a powerful position to experiment with user information, in ways that its members may not like down the road.
Those were some thoughts of experts on Facebook's push to earn money as quickly as it grows its user base.
Here is an excerpt from the story that ran in the paper Saturday:
By Cecilia Kang
Facebook may be growing like gangbusters, but the question clouding the storybook rise of Silicon Valley's latest phenomenon is whether it can figure out how to make money at the same pace.
And although the social-networking site gets a daily flood of new users around the globe, Facebook's long-term success might be challenged by something at the heart of its core business: sharing information.
The site, which passed 500 million users this week, says it's generating enough revenue from advertising to cover its costs. The company is privately held but has its sights on going public one day. It doesn't charge its users, and chief executive Mark Zuckerberg said this week on ABC News that it never will. (Washington Post Co. Chairman Donald E. Graham sits on Facebook's board of directors).
Facebook's lifeblood is the exchange of information -- people making more online friends and trading more pictures, news stories, music and one-line mood updates -- which also happens to be sheer gold for advertisers. Experts say the company treads a delicate line in getting its users to share more information without alienating them through overexposure.
Read here for full story,
July 26, 2010; 8:00 AM ET
Categories: Facebook , Privacy
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