The Social Network – making money from Facebook
Recently I went to see the new movie The Social Network. This Facebook inspired movie is obviously based around Mark Zuckerberg and his website www.facebook.com or as it was originally known www.thefacebook.com. The story is well known to anyone who has internet access and is nearly as well known as the site that has blown social media competitors out of the water.
On paper, Facebook is very similar to the very well established MySpace and also bebo. What caused the internet sensation it became. Originally it was the fact it was elite, limited to Harvard students but its growth continued when the site was opened to the general public. Social Media by its very nature needs to be popular to work and grow. The difference between Facebook and MySpace and Bebo was its lack of clutter. For anyone who hasn’t used MySpace, it is overloaded with ads videos, personalized themes. The framework is confusing to a lot of non-techy people I speak to. Bebo followed a similar trend and provided the ability to create personalized themes and also was weighed down by ads. The only improvement on MySpace was its navigation, simple and easy to traverse.
Then Facebook came along and stripped out a lot of the clutter and provided a simple service universal for all. It was easy to navigate and manipulate. There was no dominating ad presence. As is suggested in the movie, Zuckerberg never really was a money man, he didn’t like ads as much as the users who joined facebook. This is the reason Zuckerberg and fellow co-founder Saverin fell out so dramatically. Zuckerberg believed the one thing that Facebook had going for it was it was cool! This belief is one of the major factors that has enabled Facebook to be the major powerhouse it is today. Ironically Zuckerberg’s reluctance to monitize the site has made him a billionaire.
Facebook have introduced some advertising to the site, some more subtle than others but the main aim over the next number of years is to drive revenue. In Dublin Facebook have opened up office for no other reason than to make money through advertising. Lets be clear, products like Facebook Places will not be designed in any other place than head office. Facebook operate a CPC (cost-per click) service similar in many ways to Google Adwords. Their targeting is different but the basics are the same. Video ads and other variations are on offer on a CPM (Cost per thousand) basis. It then develops to featured profiles allowing more options on design etc.
Time will tell how much money can be made though Facebook advertising. The key feature of coolness that Zuckerberg saw as “coolness” still stands. 500 million plus users speaks for itself. I believe money can be made but if Facebook decide to over populate with ads users will notice. Someone will come along with something newer, something cooler and users will change. Social Media is a fickle environment and great care has to be taken in the monitization of Facebook. But while Zuckerberg remains in charge, I feel they will get the balance right.