Fox Business
Expand
Browse All Video
Watch Live

You're watching...

How Does Facebook Make Money?

Details

  • Description

    Tech Blogger Jon Rettinger breaks down the social-network website’s revenue model.

  • Duration 3:29
  • Date

Clips

Also in this playlist...

Latest Video

Auto-advance: ON

Auto-advance
View All

Transcript

This transcript is automatically generated

The Wall Street Journal says FaceBook will file IPO Paper -- as soon as tomorrow and could be valued at as much as a hundred billion dollars.

But how does that company actually make money.

What does -- get its revenue from FaceBook was the money coming from.

Joining us now is tech blogger and president of techno buffalo dot com John Iraq into.

John -- that welcome to the show.

It's a question which a lot of people have been asking because Facebook's wanted to -- was -- hundred billion dollars huge company are how does it make money.

Tell me.

So it's a -- is simple revenue model for company that big -- potentially be looking at a hundred billion dollar valuation.

They make the money from two ways add in credit.

As the other things you see on the side that a lot of folks ignore.

As you mentioned account for 90%.

Face but revenues they also have the system called credits and thinks it's a virtual currency that people can buy.

In FaceBook to use for apps and in purchases.

They're relatively simple model one thing to mention though even though your -- you know that you're still seeing them and by watching those that -- but they're still making money.

So -- -- so you don't have to click on them.

You don't have to respond.

Simply by the fact that -- all of that then you gets then added that didn't have faced who gets revenue it is as simple as that night at.

Absolutely you're so I think that the company that place than there is getting brand awareness you don't have to -- would you next now suddenly you're aware of -- -- -- And that is extremely valuable as a company like.

FaceBook I've got a way which I think would be for FaceBook to make a lot more money.

About would be to sell the information.

Which is available to it.

That we just heard that Google is going to collect information from you too Smartphones.

You know and I'm from its RG -- restaurant and bring it all together so they can sell a profile anonymously a view we thing that's worth billions of dollars in profit.

It a -- the FaceBook surely.

They could do the same thing -- So -- certainly could do the same thing.

FaceBook right now is not selling information out from the users but they are sharing it with their partners that run applications.

Oftentimes that information is me completely anonymous and given that -- application makers you be opening up a huge political can of worms.

I though as far as -- piracy is concerned however likely to keep in mind people get an up in arms in the -- never privacy issue this is still a free service.

This isn't -- this is an oxygen it's not air you could simply not use FaceBook.

Yes okay you give me your ideas here do you think that on the basis of the amount of money -- -- FaceBook takes in now and in the future.

Is it worth a hundred billion dollars should -- be valued at that.

Yes that that is though -- hundred billion dollar question there IPO could put them in the rain bank GM deal that.

And AT&T by now face look at its core is -- and networking good.

The barriers to entry are extremely high but -- that network which is known to be extremely fickle you only have to ask Friendster and MySpace.

I suddenly -- hundred head.

Billion dollar valuation directly -- goes down the tubes.

There is it -- -- right now yes absolutely I would not bet against FaceBook FaceBook is becoming synonymous.

With the Internet think based opinion that the cost of doing business now for a company to have -- FaceBook page.

I think there is going to grow and evolve and sharing of information isn't -- going to be a part of that evolution from the -- in my mind FaceBook is a work that hundred billion dollar valuation.

All right we got it John Legend -- thanks for joining us so we'll see again very soon.

Load More