Saturday, April 04, 2009

Facebook is Shakin' the Money-Maker

Facebook's fast growing popularity has only been hindered by one small flaw: the lack of cashflow the company brings in. It's a safe bet that Mark Zuckerberg, the young entrepreneur that began one of my favorite sites is probably more famous than rich. The struggle that the company faces is all-too common on the world wide web: How to turn this great idea into something profitable?

Two years ago, it was reported that Zuckerberg turned down a $1Billion offer from Yahoo! and a $2.3B offer from Google for the site. Even more recently, users protested the possibility of FaceBook becoming a paysite. (The FB group, "If Facebook Becomes A Paysite--I'm Gone" has over 453,000 members...and counting, even though the mere possibility is old news. The other group that will pay has 9 memebers).

Usually when we think of online classifieds, we think of CraigsList (another favorite, with a grassroots entrepreneurial history, which has actually made millions). Facebook Marketplace might be the next big thing to happen to the ethereal world of online classifieds. Imagine this scenario. You clean out your garage and find that pair of rollerblades that never fit, but were non-refundable. You go to the FB Marketplace and post all about it. Now all your friends instantly know, and so does the rest of the world, especially those who are shopping for rollerblades. What's different? Well, your friends can make comments ("Dude, I remember when you bought those. You were so psyched! What happened?"), ask questions ("What size? Is that in European sizing or US?"), and call dibs ("DIBS!") You don't have to answer 40 different emails about the details that you forgot to post. Those questions will get answered right there and can be viewed by anyone.

Likewise, if you are purchasing something, you can see how many people might be interested in the same thing.

Shopping with friends and shopping online simultaneously! Women everywhere must be ecstatic.

A second way Facebook is making money is through their online ads which appear next to their posts. Unlike the Google ads which are text-based, I find the Facebook ads quite annoying, but hear from colleagues they're quite profitable. If you've tried Google Adwords in the past, might be time to give Facebook ads a chance.

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