How Facebook Makes Money Off You: The Economics of Social Networks

It’s pretty hard to exaggerate the influence Facebook has built since it launched in 2004. Whether used for creating envy between “friends” or swaying political discourse, Facebook’s influence plays a huge roll.All of this essentially boils down to the currency of the “new media landscape”: attention.One study by marketing agency Mediakix found that, on average, Facebook users spend 35 minutes each day on the platform — adding up to almost five and a half years of your life. That’s more time than you will spend socializing (1 year 3 months) or eating and drinking (3 years 5 months).With Facebook expected to hit 2 billion users in 2017, this ability to hold our attention converts to truly impressive earnings. In the fourth quarter of 2016, the company’s revenue was a whopping $8.81 billion, with $3.56 billion of that being profits.And with a reported 1.86 billion monthly users, Facebook generates $1.57 of revenue per user per month. Not bad. Especially with a userbase that’s growing by tens of millions each month.But where exactly does all this money come from?

Source: How Facebook Makes Money Off You: The Economics of Social Networks

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