Facebook earns most of the money by selling advertising space. But how?
Introduction
Before learning about Facebook come to the past of the Facebook when it was started. Facebook was started in the year 2004 when Mark Zuckerberg, CEO of Facebook created it. At that time Mark Zuckerberg didn’t have money and he wanted to earn money so that he can buy some servers and some necessary requirements. Merk Zuckerberg has taken help of Eduardo Saverin and appointed as partnership in Facebook. After few days of the launch of Facebook it started showing good responses and at that time many celebrities had also registered in Facebook.
How Facebook’s Ads system works ?
Now, Eduardo Saverin suggested Mark Zuckerberg to show ads on Facebook to earn money because Facebook has not earned anything at that time. But Mark Zuckerberg didn’t want to show ads that can irritate people and at that time some conflicts started between Mark and Eduardo. Mark started thinking very deeply and came to the point that we should show interest-based ads from which people will not being irritated with the ads. Likewise, if you look for a car or search for a car in your device than Facebook will capture your data and will show ads related to a car. Facebook has world’s largest database and it has all information about you, you can forget but Facebook doesn’t.
Facebook’s Earnings
Facebook posted net income of $29.15 billion in the year 2020. Its net worth till may 2021 is $528 billion. As much as 40% of the revenue came from U.S and Canada. The other 60% came from other regions of the earth. In this pandemic its annual revenue grew upto 58% because of the lockdown many people watches Facebook, Instagram, Whatsapp, etc. In the lockdown everyone came in the online mode sitting in the bed and watching mobile.
Facebook’s Business Model
Facebook breaks down its revenue into two segments one is advertising and another is other means.
Advertising
Facebook earns most of the money by advertising. It shows people ads related to them or they want that thing. Its ads are displayed on the screen of application on Facebook, Instagram, Whatsapp and many more.
Other Revenue
Earning from this segment is by promoting other products in facebook. Facebook earned $1.9 billion in this segments and Facebook earned huge amount of revenue from this segment also.
