Facebook Sales Growth is Lumpy and Slowing

Facebook Sales Growth is Lumpy and Slowing – Marketwatch Report

It is no secret that Facebook’s business model is limping compared to other social media sites. For the moment Facebook’s more or less only revenue source is advertising. Advertising has always had good and bad times and it is seasonal. LinkedIn, one of Facebook’s competitors has a business model that stands on multiple legs. LinkedIn offers advertising opportunities and subscriptions for different services and has therefore a much healthier and consistent revenue stream.

For Facebook it is mandatory that users, personal or business, accept and use Facebook as an advertising platform. Once the company is public, which will happen within the next few weeks, dependence on advertising money, and lots of it, will increase. Facebook is for many users the star in between all the social media sites. This status can quickly diminish when things get though as a public company. Yes, there will be some time given and criticism will be held off for a while, but as soon as the company is public, things will change. Facebook claims that the site will always be free. If that can really be delivered has to be seen. It is very well possible and likely that certain services, if not all, become paid services in the future.

According to the company, Facebook is used by 900 million people world wide. The huge number of users certainly has its reason in free usage of the site. Should some or all Facebook services become paid services, it will be interesting to see how these numbers change. Very likely that such a change will turn out to be one of Facebook’s consolidations down the road.

You may also like...

2 Responses

  1. mandyf says:

    Well done Vitus. I see fracebook is already heading toward exactly what you’re saying here. More revenue needs = more ads and that is going to be a pain.

%d bloggers like this: