Exploring Blogging & Social Media

 

Why Facebook Is Worth $200 Billion

When you have a website that generates more traffic than Google and each user spends an average of 6 hours per month on the site, many spending 6 hours a day on the site *raises hand*, you can bet that you’re real value isn’t just in the server hardware the site is run on.  There has been much speculation as to how much Facebook is worth, some peg it as low as 8 Billion, recent valuations put it at over 50 Billion- but they are missing one huge, glaring detail. How does Google make the majority of its income? Their advertising platform. Google (Worth over $200 Billion) uses Adsense & Adwords to sell advertising space on both their search results and on publishers websites and when you click on an Ad Google gets paid.

Facebook has its own advertising platform, as you’ve probably noticed- but they haven’t yet taken the extra step that Google took a long time ago with Adsense. They don’t yet let publishers display ads on external websites. As many ad impressions as Facebook gets, if you combine all the blogs, news outlets, heck add in other social media sites that use Adsense and you’ve got more ad impressions than you’d know what to do with.

Most sites that use Adsense these days use Facebook’s ‘Connect’ functionality that allows people to use Facebook to log into their site. So it wouldn’t be a big leap for them to move to Facebook as their ad platform too.

“It’s not something we’re planning on at this point. But the idea comes up periodically.”

- David Fischer VP-advertising & Global Operations
Commenting on external ad platform for Facebook.

We’ll see if that stands after they go public.

I know as a publisher, if I could place Facebook ads on my site, I would. They are very clean ads, with a Thumbnail, Title, Description – much like a post on the front page of my site. They would blend a lot better with content than the majority of Googles Ads, and probably give us a very nice click through rate based on that high quality ‘blending’ with the sites content.

I’m sure there are some concerns on Facebook’s side when it comes to brand integrity, when companies pay Facebook for Adspace they expect conversions not in ad-views but in ‘likes’, but the opportunity is there for major expansion of their advertising platform. When might we expect such a platform? I’d be placing my bets on them launching one along with their IPO in around 2012.