test.ical.ly | getting the web by the balls

Jul/11

19

Facebook monetizes a website – Google+ the whole web

It’s easy to see the similarities as well as the differences of functionality of these two competitors. But these similarities and differences will change within a short term.

More interesting to see is how these two platforms differ when it comes to their income streams.

Lets look at Facebook first. Facebook earns its money with advertizing on facebook.com. Facebook does not get paid by application developers like Zynga. So the main interest of Facebook must be to get as much users for as long as possible on their website.

And for the past few months this was very successful and continues to be as you could get the impression that for many people the internet was facebook.com and facebook.com was the internet.

Actually games like FarmVille and other applications play a vital part in this as they make the Facebook platform more attractive. Also fan pages and other forms of presence for other businesses play a role there. The more businesses start making money on the Facebook platform the more internet will happen on facebook.com.

750.000.000.000+ is quite a number. Can Google+ beat that?

The simple answer seems to be: No, Google doesn’t have to.

So far there are not adverts on Google+. But even if that gets added at some point like it was on Gmail it will surely not be the main income stream. Adverts in that context will probably even be made optional just like in Gmail.

Googles main income stream is adsense and adwords. But in contrast to Facebook these adverts do not happen entirely on google.com.

Googles advertizing happens on the whole internet.

So Googles main interest is not to funnel all users to a certain domain to earn some cash. Google must be interested in users browsing the whole world wide web so see as many adsense adverts as possible.

Google+ is not about earning money but about targeting. In an environment where users freely interact with each other Google can learn about their interests. And eventually the next adsense advert you encounter on any website will have adapted to your behaviour on Google+.

Google+ is about adding social relevance to their adverts.

To me this business model sound much more powerful than Facebooks. Maybe it’s just a question of time for Facebook to start its own advertizing network as well..?

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  • Matthias

    A big plus for this post! :-)

    btw do you have an invitation for me or someone else? or is it closed currently?

  • http://jankrems.de JKrems

    Correct me if I’m wrong – but Facebook GETS paid by Zynga and Co.. They (Zynga) sell virtual goods for millions of dollars and Facebook gets 30% of that.

    But ads on other website sound like a neat way for Facebook to make some more money. Problem is: Most ads link to something on Facebook. So, they wouldn’t be much useful if some non-Facebook-user visits the site.

  • http://test.ical.ly Christian

    @JKrems you’re right of course. I forgot about the Facebook credits.. so yes Facebook gets some money from any ecommerce done on facebook.com.

    Update: there are some interesting news leaked.. http://www.businessinsider.com/facebook-basically-owns-zynga-2011-7

  • Tayhimself

    Interesting post. Mathias You can msg me on twitter @tayhimself if you want an invite.

  • Mansur

    750 billions??!?
    Sorry dude, it’s 750 millions users on facebook, not billions ;)
    But nice post!

  • http://test.ical.ly Christian

    @Mansur oops. corrected. thx.

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