With Facebook aiming for a $10 billion IPO (Initial Public Offering) in 2012 that would value the company at $100 billion, and its founder, Mark Zuckerberg, a media celebrity even before The Social Network movie was released, it’s easy to fall prey to the “marketing”: Facebook is a hugely successful business that’s almost conquered the internet. That’s not true. And there are signs pointing to trouble ahead.
Facebook’s power can be determined by interaction and, more importantly, profit. The company claims to host 800 million accounts but the BIG question, “How many are active?”, is something that they will not answer. However, revenue is easier to deduce as it’s mostly based on advertizing.
DoubleClick reported that Facebook gained an enormous one trillion page views in June 2011 (the more reliable ComScore pegged the figure at 467 million). This fueled the rumour that Facebook is bigger than Google – nonsense…but a comparison to Google does offer perspective.
Interestingly, in May 2011, Google Sites became the first to record 1 billion unique, monthly users – Facebook got 737 million. These facts become less relevant when considering that Google’s goal is not to gain page views but to provide search results (approximately 80 billion per month in 2008) that direct to pages on other websites. Google’s 2011 revenue was $40 billion whereas Facebook’s was only $4 billion. Actual profit accentuates the difference. Facebook made $350 million for the year versus Google’s $2.73 billion in the third quarter alone.
Google also became a social media competitor last year with it’s introduction of Google+ which gained 50 million users in only 6 months. Interaction is a key element for a successful social platform. The popularity button “+1” was clicked over 2 billion times per day whereas Facebook’s “Like” got 2 billion per month in 2008.
Read Part 2 here.