Insiders tell Bloomberg that Facebook is on track to generate a whopping $2 billion in revenues in 2010. The figure smashes the company's own expectations and is more than double what the company hauled last year, a reported $700 to $800 million. According to Bloomberg, the social network's swelling userbase has become irresistible to big-name advertisers including Adidas, JPMorgan Chase and Coca-Cola. Here's how bloggers are explaining the company's success:
- Display Advertising "Facebook is making gains in so-called display ads--the banners, videos and other graphical promotions that appear on websites, reports Brian Womack at Bloomberg. "It may grab about 9.4 percent of that market in the U.S. this year, up from 6.6 percent in 2009."
- It Has the Data, writes Willis Wee at Penn Olson:
It isn’t just about being cool, fun and having a large user base. The key thing in advertising is data. Facebook has all the needed data for advertisers to target based on our profiles. In a few clicks, advertisers are able to create ads for a specific group of consumers. To advertisers, Facebook is the perfect platform to make sure money is spent on the right target group.
- Games Are Important Too, writes Jolie O'Dell of Mashable: "The blockbuster success of casual games from studios such as Zynga add up to more coin in Facebook's coffers when users pay with Facebook Credits; for every dollar the user spends on Facebook Credits, the social network gets 30 cents."
- Did Facebook Purposefully Lower Expectations? "The social network may be employing a tactic more common among publicly held companies: Set lower expectations of revenues or earnings so that you can beat them and then impress investors," writes Jackie Cohen at All Facebook. "This might make more sense given how hot the company’s shares are on SecondMarket."
- This Is Just the Beginning "Once Facebook has a true web-wide view (i.e., is connected with nearly all 1.1 billion people on the web), their scale becomes completely un-ignorable by all major advertisers," writes David Pakman at Ad Age. "They are already at this point today in many markets, but this will become true next year in essentially all online geographic markets." Pakman argues that with a payments system and a social ad network, Facebook will eventually reach $20 billion in revenue. Even more optimistic than Pakman is Wedbush analyst Lou Kerner who thinks Facebook could be woth $200 billion by 2015. He explains himself on Bloomberg TV: