How Facebook, Now Meta Platforms, Makes Money
Facebook changes its name to Meta Platforms Inc. Effective October 28, 2021. Find out how the company makes money and what the new name means for its business model.
Facebook and Meta Platforms: The Basics
Facebook Inc (FB) or Meta Platforms, Inc. (MVRS), as of October 2021, is a NASDAQ-traded social media and social services company. Its products enable people to share photos, moments and other important events with friends and family using mobile devices and personal computers. Major products offered by Meta include Facebook, Instagram, Messenger, WhatsApp, and Oculus.
According to company founder and CEO Mark Zuckerberg, the motivation behind the company's name change was to develop the company into a virtual social technology platform where users can immerse themselves in the Metaverse. However, there has been much speculation that the name change was at least in part an attempt to distance the company from accusations of prioritizing profit over user safety and privacy.
Investors will be happy with the name change, knowing that Facebook is expanding its revenue streams. Some users embraced the new platform enthusiastically, while others were wary of a social technology platform that would intrude more deeply into their lives.
The company began trading under the new ticker symbol MVRS on December 1, 2021.
What is Metaverse?
On Facebook, the metaverse describes a set of connected digital spaces characterized by a social presence that allows users to feel like they are with other people, no matter what world they are in.
Users can access the virtual world through Oculus Quest virtual reality headsets, augmented reality glasses, smartphones, computers, and game consoles.
Facebook business model
The company offers its collection of social media apps for free to its users. It then requires advertisers to serve ads that target specific groups or user characteristics.
Ad pricing is based on an auction system where ads compete for impressions based on bids and performance. The company that sends the ad is only responsible for the number of clicks or impressions the ad receives. Impressions are the number of times an ad is shown, even if the ad is not clicked.
The company that wants to run an ad sets a maximum budget and will be billed monthly based on ad performance.
The upside: Advertising is Facebook's primary source of revenue, but the company plans to use the Metaverse structure to create other sources of trust in the future.
How does Facebook make money
The main way Facebook makes money is through advertising revenue. Although the company offers other products besides the social media platform, its residual revenue streams are minuscule compared to advertising sources.
According to its 2021 annual report, nearly all of the company's revenue comes from selling ad space to marketers. And in its third-quarter 2021 report, 97% of its revenue came from advertising, with only 3% from other sources. Its ads allow marketers to reach specific groups of people based on various factors such as age, gender, location, interests, and behavior. Marketers buy ads that can appear on multiple meta-platforms, including Facebook, Instagram, Messenger, and third-party apps and websites.
While advertising remains the primary source of revenue, other revenue streams are gaining momentum, growing 195% year-over-year by the end of Q3 2021. Advertising revenue only grew 33% in that period.
The following are the products offered by our company:
1. Facebook
Facebook allows people to connect, share, and communicate with each other using mobile devices and personal computers.
2. Instagram
Instagram is a platform where people can express themselves through photos, videos, and private messages. Additionally, users can connect and shop with their favorite businesses via Instagram Feed, Stories, Reels, IGTV, Live, Shop and Messages.
Learn how to monetize Instagram with the Facebook / Meta platform.
3. Messenger
Messenger is a messaging app that allows people to connect with friends, family, groups, and businesses across platforms and meta devices through chat, video, and rooms.
4. WeChat
WhatsApp is a messaging app for people and businesses all over the world to communicate and transact more securely and privately than the Messenger app.
Learn how WhatsApp can make money with Facebook and meta platforms.
5. Facebook's Reality Lab
Facebook Reality Labs develops virtual and augmented reality products, including Oculus and Portal, to help people feel connected within the Facebook metaverse, or virtual reality. Oculus Quest enables people to go the distance with virtual reality hardware, software, and content, and Portal helps friends and family stay connected and share moments.
Find meta alpha platform
Investors interested in learning more about Metaplatform's business or finances can find useful information and analysis in Seeking Alpha. The stock quotes page on the Meta platform alone contains company analysis, breaking news, charts, key stats, and advanced commentary on stocks with quantitative ratings and factor scores.
Investors who wish to search for a company's financial data can do so from the menu bar shown below:
at a minimum
Facebook still relies heavily on PI ads as its main source of revenue, but by changing its name and business focus in the future, it He hopes to develop other sustainable sources of income in the near future.
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