Recently, Mark Zuckerberg announced finances for the privately held company, projecting $300 – $350 million in revenue.  Facebook is currently breaking even, but Zuckerberg plans to spend $200 million on servers next year.  The large increase in server costs would give Facebook a negative cash flow. 

So how does Facebook make $300 million dollars in revenue?

  • Advertising
  • Facebook Gifts
  • Selling information

Its somewhat obvious that a lot of money can be made by advertising, and with 150 million active users, gifts will add up.  I’m assuming these two items make up the majority of the revenue, but there is another source of income that most Facebook users are not aware occurs.

In Facebook’s privacy policy, they have the right to sell your information to other companies.  This means that Facebook has become one of the largest source of marketing information for the 30 and under demographic.

The first half of the following video does a great job at explaining how Facebook sells your private information.  Personally, I would ignore the second part of the video (supposedly Facebook is a government consipracy to spy on you!)

One Response to “How does Facebook make money?”

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