Facebook’s business model

Re:Facebook’s business model by qq66 on Tuesday May 15, 2012 @07:37PM (#3979538)

Disregarding the incredible business opportunities that are available to Facebook (Credits, taxing Connect more broadly, targeted offers based on very detailed demographic profiles), the fact of the matter is that Facebook may be able to one day identify purchasing intent not only before Google, but before the user themselves identifies that intent.

If Facebook knows that you recently got married, and that you just surfed over to a baby website (equipped with the "Like" button), you might be intending to have a child, even if you're not yet pregnant. They can start selling you a daily-deal on diapers before a kid exists to soil them.

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Re:Facebook’s business model by ajross on Tuesday May 15, 2012 @07:42PM (#3979552)

Target already beat them to that model:

http://www.forbes.com/sites/kashmirhill/2012/02/16/how-targe...

More seriously, what you say may be true, but that's a stretched definition of "purchasing intent". Google wins here not because they happen to get eyeballs of surfers interested in diapers, but because people actually use Google to find places to buy diapers. That's a tough nut to crack, and the point of the linked article. More generally: facebook has "eyeballs" and page views, but search providers have the people with their wallets already out.

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Re:Facebook’s business model by qq66 on Tuesday May 15, 2012 @07:53PM (#3979590)

As an example of getting a purchase before the intent is created, LivingSocial presented me with a number of photography-related deals which I bought. When it was time to make a print of a photo I liked, I didn't think to Google for a printing service, I thought "Let me use my LivingSocial on this."

Facebook has way more information about me than LivingSocial, so I assume they could do a better job of that.

Interesting post on Target.

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Re:Facebook’s business model by ajross on Tuesday May 15, 2012 @08:44PM (#3979763)

Amazon does much the same thing with its recommended items, and it's cute. I'm sure it drives sales, and by extension would be (is? Not sure if Amazon sells ads in that context) worth advertising to. But realistically it's got to be a small part of Amazon's revenue. And Amazon's revenue dwarfs Facebooks.

Honestly my intuition says that there isn't that much money in that kind of "buy this, you don't even know you need it" advertising. Consumers generally know what they want already.

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Re:Facebook’s business model by qq66 on Tuesday May 15, 2012 @09:35PM (#3979910)

"Buy this, you don't even know you need it" is basically the foundation of American consumerism. It's the concept behind dandruff shampoos, pet rocks, and designer clothing.

BTW, Amazon's revenue dwarfs Facebook's but Facebook made more profit last year than Amazon ($1 billion vs. $900 million).

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Re:Facebook’s business model by Jare on Tuesday May 15, 2012 @07:56PM (#3979596)

They will be selling me diapers while I'm socializing (!), not when I'm trying to buy diapers. It's just not very powerful.

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Re:Facebook’s business model by qq66 on Tuesday May 15, 2012 @07:59PM (#3979609)

You don't just socialize on Facebook. I listen to music on Spotify (tied up with Facebook), I read articles people post on Facebook, and most importantly, I visit hundreds of web pages with Facebook "Like" buttons which Facebook can use to build a profile of what I'm like even when I'm not on their site.

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Re:Facebook’s business model by waterlesscloud on Tuesday May 15, 2012 @08:14PM (#3979660)

What are you doing when you're at a baseball game?

And yet there are plenty of ads there. Why? How do they work?

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Re:Facebook’s business model by Drbble on Tuesday May 15, 2012 @08:35PM (#3979723)

Mostly brand awareness, which is famously inefficient and only works for products with extremely wide mass appeal, like Coke.

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Re:Facebook’s business model by samstave on Tuesday May 15, 2012 @10:01PM (#3980001)

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