Is Facebook Transforming Into an Operating System?
ADOTAS – Facebook’s finances are growing by leaps and bounds. According to an inside source (and published widely), the first six months of 2011 have brought in $500 million in net income to Facebook. As a private company, Facebook does not have to publically disclose its earnings, yet for a point of comparison, Facebook earned $335 million in net income in the first nine months of 2010 and revenues of $1.2 billion, according to documents from Goldman Sachs.
The reason for the increase in growth? Industry experts point to the Facebook advertising model as the main factor. Facebook ads have boosted revenue and made a big impact in the online advertising world. But Facebook’s partnership with virtual goods providers, the future partnerships with music providers and popularity on mobile devices are pointing to one possible outcome – a Facebook “operating system” that ties together the best of the web and gives users a one-stop destination.
The Operating System Approach
Facebook has already shown dominance in advertising, so creating a operating system is not so far out of its reach. According to the analytics firm comScore, Facebook accounted for nearly 1/3 of all Internet display ad impressions in the United States in June, which was more than the combined total of Yahoo!, Microsoft Corp, Google and AOL Inc.
The truth is that Facebook reaches targeted audiences, and advertisers want a piece of the action. Demand has grown so much that Facebook was able to increase ad prices by 62% since the fourth quarter in 2010.
Facebook can offer insights into user behavior that other platforms just can’t. When users endorse products and companies with a “like,” they are providing valuable data that advertisers can use to understand how best to reach consumers. While other advertising platforms like Yahoo! are relying on third-party data, Facebook can bring users right to the source. Large brand advertisers and local businesses are putting their marketing dollars into Facebook because they can target users based on interest and reach a large number of consumers all at once.
Closed Loop
People are flocking to Facebook because it offers a “closed loop” entertainment platform in addition to social connections. Zynga’s FarmVille and other social games keep users interested and in the social network (Facebook receives a 30% cut of the sales of virtual goods).
There are also other entertainment possibilities on the horizon: Facebook has released new features that port in music services from Spotify and Rhapsody. Social shopping app “SneakPeeq” allows Facebook users to browse through products and “like” them if they are interested. The likes show up on their stream, and the more people that “like” the item, the lower the price goes. These components come together to give users more reasons to visit Facebook, and more opportunities for advertisers to reach them.
The closed-loop operating system is being taken to mobile devices as well: Mobile web usage grew by 91% last year and 32% of that time is spent on social networks. Of every 74 minutes, 14 are spent on Facebook apps.
Facebook partnered with mobile product and app giant HTC to create the HTC Status, the only phone that allows people to directly post to their Facebook accounts with a button. The biggest sign that Facebook may be taking a comprehensive approach to mobile browsing is Project Spartan. Facebook plans to integrated directly into the mobile browser giving users instant access to their favorite apps.
With its growing advertising revenue, more features to keep users involved in the system and plans to make mobile browsing a seamless experience for smartphone users, we may be quickly approaching the day when Facebook is considered to be an operating system rather than a destination website.
Reader Comments.
Leave a Comment
Article Sponsor
More Features
-
Loading ...
Latest News
- Sense Networks Releases New Predictive Mobile Ad Targeting Services May 23rd 2012 ADOTAS – Mobile location data/services provider Sense Networks announced today a [...] more »
- Marketo Takes Marketing Automation to Social Media May 23rd 2012 ADOTAS – At a point when Facebook’s flop of an [...] more »
- Adap.tv Announces Video App Center, Multiple Tech Solutions Under One Roof May 23rd 2012 ADOTAS – Today, video advertising platform and marketplace provider Adap.tv unveiled its [...] more »
- AdTruth Assembles Industry Leaders in Gambit for a “Mobile Universal Identifier” May 22nd 2012 ADOTAS - Device recognition service AdTruth (a division of fraud [...] more »
- Adobe Announces “Simulcast” Solution to Make Cross-Device Viewing More Like TV May 22nd 2012 ADOTAS - Today, Adobe released an updated version of its [...] more »
- Two Reports: Photo/Video Is the Fastest-Growing App Category May 22nd 2012 DM CONFIDENTIAL – According to recent numbers released by Flurry, [...] more »
- Facebook’s IPO: You Knew It Was Coming May 18th 2012 ADOTAS - It’s been a day of superlatives, as the [...] more »
Features
- Infographic:”The Social Sharing Button Playground” May 23rd 2012
- How The New “Call Spammer” Spends Your Mobile Click-to-Call Budgets May 23rd 2012
- Infographic: Where to Sell Online (A Flow Chart) May 22nd 2012
- How Online Measurement Is Transforming the Traditional Ad World May 22nd 2012
- Infographic: The ROI of Tag Management May 21st 2012
Spotlight
Sponsormob Leads the Way Into RTB for MobileADOTAS – For more than half a decade, Berlin-based tech firm Sponsormob has remained relevant in an industry characterized by [...] more...
Reader Favorites
Classifieds
- Business Director-IEB-Microsoft Studios (792444)
- Marketing Communications Manager, Senior-IEB-TV &
- Senior Industry Marketing Manager - Media and Ente
- MARKETING DIRECTOR (medical software company)
- Senior Product Marketing Manager
Recent Comments
- How The New “Call Spammer” Spends Your Mobile Click-to-Call Budgets: [...] benign “pocket dial” or “accidental call,” call spammers explain why click-to-call ads can receive as
- The motivations behind gamification: Tapping into psychology | e6be marketing: [...] (http://www.adotas.com/2012/05/starting-simple-with-gamification/) (http://www.informationweek.com/thebrainyard/news/social_networking_private_platforms/231900162) [...]
- David: Photo sharing and video sharing apps are growing at an exponential pace. This is but
- Afternoon Announcements: Seven Essential Email Marketing Tips, How Engagement Can Measure Customer Sentiment & Lessons in Content Strategy From Children's Books | Duncan/Day Advertising: [...] How Much is a Facebook Follower Worth? [Ragan's] How Engagement Can Measure Sentiment &
