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While Facebook’s revenue is reportedly going to surpass $500 million this year, it’s still a fraction of the revenue from large, publicly traded tech giants. For example Google generated over $21.7 billion last year, a large portion of which came from their self-serve advertising platform. Facebook has a long way to go before they hit $21.7 billion but if a new report published by eMarketer is correct, Facebook should have a good shot at getting there.
Facebook’s self-serve advertising platform has worked especially well for one group of advertisers: local businesses. According to a new report from eMarketer, local online advertising will surpass national online spending this year. By 2013 local online advertising is expected to reach $19.18 billion, far beyond the $14.47 billion national online spending expected the same year.
If Facebook can continue to experience rapid growth in local advertising, the company could become the most dominant player in the local space. Additionally, Facebook is looking to continue driving growth in the brand advertising space which means that these two channels combined are worth billions. Add to that a robust virtual goods platform and you can begin to see how Facebook’s revenue could eventually match if not surpass Google’s.
It also means that Facebook shouldn’t be in a rush to go public as the company should have an exceptional amount of revenue growth even as they surpass the $1 billion revenue mark (which we’d expect to happen next year). Despite some developer frustration with constant changes to the platform, Facebook continues to make one right step after the other when it comes to protecting their most valuable asset: an active user base.
If Facebook can continue making smart decisions as they have in the past, there’s no doubt that the company will have explosive revenue growth. The latest eMarketer data is just one more sign to add to the numerous others which suggest Facebook has a massively profitable future ahead.
I was talking with the wife and some associates last week and we were discussing how much content facebook generates a day and its rapid growth. We too came to the conclusion since facebook controls access to the content and people are very sociable given the right platform that FaceBook would be bigger than google one day. Some friends/associates i know are on facebook more than they watch tv. It’s their new recreational viewing.
Too bad developers can’t get in the precise location targeted ads on Facebook.
Facebook needs to be very careful with maintaining the trust they have captured from users to date. Their lastest news feed changes make no sense to many users. I have been watching the complaints from a group on facebook with 1.7 million members now. They made 2 big mistakes. It seems they moved highlights to “news feed” and it makes no sense to users how facebook’s algorithm chooses what is important posts. No logic can correctly interpret the multifaceted relationships between many “friend” types.
The 2nd big mistake was including many “action” type posts in the live news feed. This is not intentional communication across facebook, this is someone adding a friend, joining a group etc. Many are feeling their privacy is invaded making their actions so public in the live news feed and others are just annoyed by the clutter it creates in an already busy page list. 9 times out of 10 you dont even know the person a friend added.
As users smell the winds shift and their personal information posted on facebook being actually distributed, many might chose ways to mask themselves or withdraw from facebook. It is one thing to read the terms of service and see they can, when they do, people may get upset.
Facebook needs to be careful with first an application change that irritates users and following it up with pulling their pants down exposing their identity to who knows what 3rd parties.
Facebook continues to show unbelievable growth this past few months and they should continue to maintain it to increase more revenue. I am a self confessed facebookie and I spend most of my free time with just Facebook (whether in net or blackberry). Looks like Facebook had an increased number of non-US resident facebookers which is a factor of having a rapid growth.
I don’t agree there has been unbelievable growth in the past few months. In fact, this site statistics website shows it flattened starting June for the first time since facebook started. It then popped back up in Sept, maybe because of kids returning to school. They boast 300 million users, but these stats show 125 million unique users over the month of Sept 09. It is hard to gauge the impact on the ban in China on that list of 300 million and what percent may no longer have access. Facebooks stats say 70% of the 300 million are outside the USA.
http://siteanalytics.compete.com/facebook.com/