How does Facebook make money?


Quick Answer

As of 2014, Facebook's revenue comes primarily from advertising and from fees charged to developers who sell virtual goods and services through games on the platform. A small amount of revenue comes from posts that users pay to promote and from Facebook Gifts sales.

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Full Answer

Advertising is Facebook's main source of revenue. Facebook offers targeted advertising using information from user profiles as well as internal measurement and analytics tools. Advertisers opt to pay either per click or per one thousand impressions and can set their own maximum price and maximum budget in advance. Facebook also guarantees a fixed number of ad impressions for a fixed price. Facebook Exchange also allows advertisers to bid on traffic in real time and to access an offline audience through Custom Audiences.

Facebook games also frequently offer players the ability to purchase virtual items, enhancements, or coins and tokens in the case of casino games. Facebook requires game developers to use its internal payment system and charges fees for the service. The revenue from this is significantly less than that of advertising but still significantly more than any other revenue stream.

Facebook's statement in 2014 that revenue from other sources was "immaterial" indicates that it relies almost entirely on advertising and payment system fees to make money.

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