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The Facebook Business Model Diagram - Are They Morphing In To A Media Company?

Written by Simply Zesty on

There is so much written about Facebook

here and on other blogs that it can be hard to keep up with the relentless pace of change at the world's biggest social network. With that in mind I wanted to try and strip away all the fluffy talk and focus on everything we pretty much know for certain is happening on Facebook and coming to the site within the next year. They haven't officially announced all of the features below but there have been enough leaks like the iPad, music and credits becoming more widespread to make the assumptions that all of these things will happen. It's all about an IPO in 2012 and with that in mind here is what their business model will look like in my opinion and where they have all their attention focused on. It's actually quite simple...

Replicating The Games Success

One of the biggest successes of the Facebook platform has been their social gaming efforts with third party developers like Zynga. Facebook look like they are going to try and replicate that model (they take 30% of all revenues via Facebook credits) across different form of media. Video streaming of movies is already under way and being tested, they have been working on a music platform for some time and just yesterday they snapped up the creators of an interactive eBook company (The video below is a demo given by one of the people behind the company Facebook bought yesterday). All of this seems to point towards 2 very clear arms of the business...advertising and credits for the consumption of media and games.

Real Money About To Start Flowing

Facebook don't have to declare their revenues but they are thought to be around the $2 billion mark for the last year. That is a lot of cash but if everything goes to plan and Facebook are to return the huge investment to VCs and their backers they will need to start increasing that even further. Facebook have been slow and cautious on the introduction of credits but they could be the key to unlocking even bigger revenues. Having a platform with a billion users (presuming their growth continues they will hit that next summer) all connected socially with a currency in there and super targeted advertising means that Facebook could just get their $100 Billion valuation. What do you think? Are Facebook turning in to a media company? Have I missed any revenue streams that they could potentially exploit?

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