Facebook is one of the biggest social networks in the world. Facebook, which was co-foundered by Mark Zuckerberg, has 500 million users and counting. It allows users to create their own profile and able to communicate with other users by texting, sharing, group chatting and few other functions.
However, Facebook is confronting many struggles in making revenue although it is the leading social network. It requires to improve its business tactics in order to gain higher revenue and attract more investors.
Like other social networks, Facebook generates revenue via advertisement. One special thing about Facebook is it allows advertisers to hit target groups quickly by matching with profile, preferences etc.
There are many users who dislike sharing their personal information to public, except their close friends, though. This is an obstacle for Facebook as it wants to gather information as much it can for advertisers so that it can generate much money but it has to put restriction on privacy policy as well. As such Facebook is doing to get confidence from users in order for them share their information as much they can.
The Company has used many different policies to recover the situation such as using Beacon app to show a friend of friend is using one particular service. However, Facebook received many criticism regarding disrespecting users’ privacy. Later, Facebook tries to improve its privacy policy but still facing challenges such as an app in Facebook could gather data from users for the advertising companies. This action really deteriorate the situation.
Nonetheless, no one knows yet how much Facebook will earn. Facebook, on the other hand, announces that it will not charge users any fees for using its Facebook account. Facebook’s total revenue in 2010 probably reaches $1 billion. It is worth to not that Facebook has become the top social network nowadays
In short, this article wanted to show that Facebook is generating its revenue from advertisement. But to spread advertisement and hit the targets, Facebook has to know about its users profile and preferences. However, users did not want to share their personal information to public, except their close friends. This creates an obstacle for advertisement firms to advertise their products to the right groups. This problem has limited Facebook in generating as much money it wants. Facebook also faces privacy problem as its users require higher restriction on privacy while Facebook wants its users to share personal information so that it allows advertisement to run smoothly. However, what Facebooks has to do first is to increase confidence for users. In overall, Facebook’s health is quite well developing in these days.
