Facebook has yet to prove its business model to the world, with its stock hovering at $27, well beneath its $38 IPO price, and its value to advertisers questioned. But of late we've seen some ideas that might make Facebook some real money. Now out of its regulator-mandated quiet period, Facebook has wasted zero time reminding us it still has cred. Tuesday, for example, Comscore released some maybe-favorable data showing how Facebook's advertising model has resulted in sales for some companies. This had bloggers skeptical, as the sales may not have resulted from ads businesses paid for. And we're back where we started. The current ad model doesn't have anyone convinced. But, that doesn't mean all hope is lost for Facebook. Here are some more creative ideas we've seen floating around.
Big Data. Though Mark Zuckerberg has ensured users it does not intend to use their data for evil, Facebook has an entire (growing!) department called the Data Science Team, which is dedicated to studying all this data, reports Technology Review's Tom Simonite. "It is a kind of Bell Labs for the social-networking age," he writes. "They apply math, programming skills, and social science to mine our data for insights that they hope will advance Facebook's business and social science at large." That "advance Facebook's business" part is where Facebook might make some real money. What, exactly that is, nobody knows, as Simonite explains:
That stash of data looms like an oversize shadow over what today is a modest online advertising business, worrying privacy-conscious Web users (see "Few Privacy Regulations Inhibit Facebook") and rivals such as Google. Everyone has a feeling that this unprecedented resource will yield something big, but nobody knows quite what.
But, he has at least one idea.
One potential use would be simply to sell insights mined from the information ... Assuming Facebook can take this step without upsetting users and regulators, it could be lucrative. An online store wishing to target its promotions, for example, could pay to use Facebook as a source of knowledge about which brands are most popular in which places, or how the popularity of certain products changes through the year.
Of course, Simonite mentions that one big but: Facebook has to do all of this without upsetting its users. Without users it has no product.