>"They produce software as a service."

No Salesforce, Box, Slack, Zendesk - these are examples of SaaS companies. Customer pay for those services, the service is the product being sold. With FB the user is the product being sold.

Who is the "user" product being sold to? A business, right? And how do they buy the product? Thru a web browser, right? How is that not SAAS?

>"Who is the "user" product being sold to? A business, right?"

Yes and you just illustrated my point. Advertisers aren't buying software from FB they're buying access to FB users.

Because the product being bought isn't software.

> With FB the user is the product being sold.

This is not strictly true. FB makes Workplace, which is a sort of Facebook for internal and cross-company collaboration (competing with Slack): https://www.forbes.com/sites/kathleenchaykowski/2017/10/26/f...

You can be pedantic all you want but FB Workplace is many of the regular FB platform features repurposed without the advertising. Workplace is not their core product nor is it where the majority of their revenues or engineering efforts are concentrated.

Since they're using it internally to make facebook work, I'd say it's a core product and a lot of engineering efforts are being expended to make the company run better.

It just also happens to be something you can sell to others too.

Since you consider it a core product, what do you estimate the portion of Facebook's revenue comes from this core product in relation to the billions they receive elsewhere.

I don't know, how much do you estimate any given road contributes to the GDP of the US?

It's infrastructure that enables the rest.

What makes you think they produce software as a service? Their users aren't their customers, advertisers are.

That term refers to software applications made available in a browser. That's how I view Facebook.

That's the medium, not the product.

A company that makes radio program, and generates revenue by selling ad spots, is a media company.

A company that makes TV programming, and generates revenue by selling ad spots, is a media company. It's in the same line of business as the radio company, even though the radio company doesn't have any soundstages or camera operators.

And guess what, both of those companies stay media companies even if they start streaming sound or video in a browser instead of on the TV. That's just replacing the distribution team, a rather small part of their business by headcount. They're still media companies, because they make money by selling ad space in content.

The distinguishing feature of facebook is that it takes user-generated content, and generates revenue by selling ad space. That's the "social" in social media, it's what makes social media different from traditional media. But the other part is the same: They generate revenue by selling ad space inside the content that they manage.

No "software applications made available in a browser" is not the single defining characteristic of SaaS. SaaS is foremost a licensing and delivery model although it is often accessed via a browser it is not a prerequisite. There are SasS offerings with desktop integration points, sync clients, native iOS apps etc.

Sorry if this is an obvious question: would you call Microsoft Office 365 a software as a service? They charge per user per month I think.

Yes I would consider Microsoft Office 365 a SaaS offering. It's licensing is done via a subscription and delivery is via infrastructure managed by MS.

They aren't providing software as a "service"- they're providing user data and eyeballs as a service.

You're confusing the business model (advertising) and the medium (software).

I think we've come far enough to realize that there are many business models to the concept of software being delivered in a browser as a service. The original model was companies paying a monthly fee for a subscription. Now we have many different types of models. The point is that FB makes an application for consumers and businesses. It is delivered as a service through a browser.