How Does Facebook Make Money From New Resources?

I’m in no doubt, you are known that the Facebook is the most visited website in the world after Google. However, do you know how Facebook earns money? It is working on several monetization methods and making a steady revenue growth year-by-year.

With over 1.59 billion active users as of Dec 31, 2015, the company one thing for sure knows how to add more users and mint more money showing them ads they love to click.

You may check the recent Facebook earnings report, and you will come to know that 2015 was a good income year for Facebook.

facebook-earnings-report

It is mainly due to the company that has always focused on two things, how to add more users to the platform despite the occasional negative opinions and how to attract more advertisers that sell to these users.

I have already written a post on how Facebook earns money through traditional ways and today I will take the post further and give you an idea of how Facebook makes money with its recent resources.

New Facebook Revenue Sources

Now, let’s see how the recent acquisitions and content monetization plans of Facebook bring a load of revenue.

how-facebook-makes-money

Recent Acquisitions of Facebook

Facebook has always bought new promising products that have profitable future. It has invested about $25 billion in buying 14 companies in total. It’s often been criticized for making over hyped deal paying a huge amount for buying companies, but Facebook as always proved that its deals are rewarding in the future.

Most acquisitions like Friend Feed (real-time newsfeed about friends), Face.com (facial recognition software), HOT.com (a design firm in NY), Oculus (virtual technology startup) have been behind the scenes and make Facebook a better product and experience for users.

While others like standalone apps like WhatsApp, Instagram, etc. make money by contributing to the revenue stream of the company.

Here are some of its latest Facebook revenue sources that help it generate a constant income.

1. WhatsApp

Facebook’s largest acquisition till date, has made messaging seamless over the years. WhasApp might not be the most revenue-generating source for now, but Facebook made anywhere between $20m last year. WhatsApp recently did away with its $1/year plan making the platform free for all recently

2. Instagram

Instagram was Facebook’s most popular buy that has proved a profitable deal ever since. Instagram has even outperformed Facebook in terms of engagement level. It is making a good amount of online revenue. Instagram opened up showing ads in October last year and introduced video ads before a couple of days.

The simple logic behind Facebook buying products and companies into its own portfolio is that it can further monetize them with successful strategies. For example, having bought Instagram for 1 billion dollars that is roughly broken into $30 per user. 

For a company like Facebook, making $100 out of a $30 user is no difficult game. So, there is profit and future business goals that drive every acquisition of Facebook.

Facebook officially hasn’t yet confirmed any earnings report for Instagram, but trade analysts predict Instagram to rake in 5 billion dollars per year in near future.

3. Facebook-Microsoft Agreement

Even though the Facebook and Microsoft have ended their partnership after 7 years for Bing search engine, both giant officials said that they will continue to have a great partnership in other areas. 

Recently, both the companies have joined hands to play a game in virtual reality space. You may read their partnership deal details through this Businessinsider article

Facebook Earnings Through Content Monetization Plans

Facebook, as a standalone product has also evolved itself to generate multiple sources of income other than the native advertising.

The company has introduced video content (that is giving the video mogul YouTube a tough competition with 4 billion views per day), revamped the messenger app and the notes platform (to provide competition to traditional blogging platforms like Blogger and WordPress.com).

Let’s have a look at how does Facebook makes money through content monetization plans!

Messenger App

Facebook has now made it more addictive to businesses to join messenger. It has made it easier to enable them to get organic interaction on the platform. It will thus monetize them at some point.

Facebook Messenger is soon to support companies paying bills to and receipts to customers via messenger. They will also provide shipping details of goods purchased via messenger. It is huge to bring in business to Facebook in near future.

Videos

Facebook has had great success with video on its platform recently. It has already started making money by introducing video ads on both its platforms Instagram and native Facebook.

Facebook, like YouTube, recently proposed allowing users to monetize their own video. This scheme works on a revenue sharing model in which it will keep 45% of the revenue you generate on monetizing your videos.

Mobile Users

Facebook’s largest asset is its mobile users! Facebook has left us to be mobile commoditized with all its planning and we easily support it. Yes! Facebook make great profits through mobile advertising as a huge percentage of us use Facebook on mobile platforms.  

This Facebook revenue is generated by showing us mobile ads; enabling celebrities to reach out and making companies sell their products to us. If you are still wondering how Facebook makes money through small screen gadgets, read the recent post of VentureBeat about the Facebook ad revenue on mobile

Wrapping Up

The giant social network, Facebook is still on the rise, introduces fresh features and makes huge money based on its acquisitions and content. Not only the above mentioned earning sources, but the Facebook would also earn money through Facebook Instant Articles that runs on mobile devices.

Besides, the company turned more intellectual and likely to earn money from unlikely places. You might be wondering with its immense growth, but I would say that its innovativeness brings satisfying features for users and thinks from a business point of view.

I hope that you are very clear how does Facebook makes money. Do you agree with my viewpoints on its growth? What do you think about the new earning sources of Facebook? Did I miss to mention any important monetization method of Facebook with which it makes a recurring income?

I would like to know your valuable views on how Facebook makes money, use the comment section to share your thoughts.

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    • Nirmala Santhakumar
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