Facebook Will Probably Be More Profitable Than Amazon This Year. In the first six months of 2011 Facebook had $1.6 billion in revenue and about $800 million in operating income, says a source I trust a lot.
That revenue number has been reported before. And the 50% profit margin is in line with last year’s $2 billion in revenue and $1 billion in operating income. With Facebook growing revenue and profit by more than 50% every six months, it won’t be surprising if they hit something close to $2 billion in operating income for the year. To put that in perspective, realize this – Facebook will likely be more profitable than Amazon this year. On a quarterly basis they’re already there. Amazon’s Q3 financials are coming out this week, and Citi analyst Mark Mahaney says to look for around $298 million in operating income from Amazon for the quarter.
Mahaney also notes that Amazon’s Q4 may not look as rosy as usual due to the launch of the Kindle Fire. Exclusive: Facebook first half revenue hits $1.6 billion: source. How Facebook Reaches $20B In Revenues. Facebook, at over 500M users, has transformed the web, and indeed the planet, by connecting us all in ways we weren’t before.
At their current growth rates, they will finish this year at around 600M users and will be larger than Google by the end of next year (if they aren’t already, see here). (As Facebook’s head of growth once told me, the nice thing about growth being truly viral is that it becomes very easy to predict your future growth. Facebook actually employs several epidemiologists to measure and predict growth.) Once Facebook has a true webwide view (i.e., is connected with nearly all 1.1B people on the web), their scale becomes completely un-ignorable by all major advertisers. They are already at this point today in many markets, but this will become true next year in essentially all online geographic markets. Today, we understand that Facebook generates about $2 – $3 per user per year in revenues. There are pros and cons to these forms of advertising.
What will? Facebook 2010 Sales Said Likely to Reach $2 Billion, More Than Estimated. Facebook Inc., the world’s most popular social-networking service, is likely to generate 2010 revenue of about $2 billion, a larger sum than projected earlier, according to three people familiar with the matter.
Sales will more than double from 2009, said the people, who declined to be identified because the privately held company doesn’t disclose revenue. Facebook had $700 million to $800 million in sales last year, and the 2010 figure was previously expected to be closer to $1.5 billion, according to two other people familiar with the matter earlier this year.
Facebook’s more than half a billion users have made it an attractive target for advertisers, including Coca-Cola Co., JPMorgan Chase & Co. and Adidas AG. In October, Facebook surpassed Yahoo! Inc. when ranked by the number of global users, making it No. 3 behind Google Inc. and Microsoft Corp., according to ComScore Inc., a research firm in Reston, Virginia. Mark Zuckerberg, chief executive officer of Facebook Inc. Close Open. How Does Facebook Make Money? Facebook To Grow Its Virtual Economy. 26 February '10, 01:24am Follow Facebook has announced that it will expand its Facebook Credits system across the site.
Facebook says that this step will help to expand its microtransaction features into more apps. In a blog post, Facebook Product Marketer Deborah Liu said that, “This new option is live in a few applications to a small percentage of users, and will roll out more broadly over the coming weeks.” This widening of the Facebook Credits program represents Facebook’s desire to take their cut of the booming microtransaction market on their site. With the advent of Facebook applications, companies such as Zynga and Playfish have included in-game downloadables in their applications as a major source of revenue.
The initial problem with these transactions is that there wasn’t a consistent currency across applications. The system is also a huge boon for Facebook. Facebook '09 revenue neared $800 million.