Economics Questions

Re: How Much Facebook is Worth

Andris Birkmanis — Sat, 12 Feb 2011 17:45:22 GMT

Just to back up my previous claim: e.g., http://mashable.com/2011/01/17/facebooks-ad-revenue-hit-1-86b-for-2010/.

And I made a typo - the ads are in the right column, not top.

Re: How Much Facebook is Worth

Andris Birkmanis — Sat, 12 Feb 2011 09:34:23 GMT

Until recently, Facebook made practically all of their money from advertising (located at the far top column of the site). Recently, they started making some money from in-app sales, though I recon it's still a minor part.

I guess they might start charging app developers in future (who right now get free hosting plus a lot of free traffic) - but only if the owners decide this additional revenue is worth slowing down the rate of innovation in app development brought by "free riders".

Re: How Much Facebook is Worth

BrianAnderson — Sat, 12 Feb 2011 04:33:16 GMT

Oh yeah. For some reason I was thinking that Facebook had no advertisements yet, so I was curious as to how they paid employees, but that makes completely sense now.

Re: How Much Facebook is Worth

DanielMuff — Sat, 12 Feb 2011 02:12:55 GMT

What do you mean?

My understanding is that Facebook makes revenue by selling advertising, user data, and, I think, through in-app purchases.

Re: How Much Facebook is Worth

BrianAnderson — Sat, 12 Feb 2011 02:00:52 GMT

Is all of the future income generated through assumed advertisements?

Re: How Much Facebook is Worth

DanielMuff — Sat, 12 Feb 2011 01:32:31 GMT

In academic finance, it would be the present value of future cash flows.

How Much Facebook is Worth

BrianAnderson — Sat, 12 Feb 2011 00:55:20 GMT

How do they determine how much Facebook is currently worth, and how does it currently make money? I'm confused as to how websites make money in general aside from advertisements.