image thumb20 Facebook Continues Its Win Win Road Run As Advertisers Boost Ad Spending

Everyone has eyes on a large market that attracts people in large numbers and more importantly keeps them engaged or glued to. The same rule applies online when services grow massive and advertisers are ready to flood investments in these services or destinations. The example is Facebook, which only recently cross the half a billion user mark and has attracted investments in bulk from its advertisers.

In a recent interview given to Bloomberg, Facebook’s Chief Operating Officer, Sheryl Sandberg stated clearly that advertisers increased their budgets 10 times as much as it was last year. Before I continue, let me state clearly, experimentation to consider social networks and by large, Facebook is over. The social network is considered a potential market one that can be leveraged to maximize profits and promote products [ideas, campaigns, you name it they have it]. The best part, Facebook is not charging a penny from its users for using the social network.

Why Expand?

Seeing the growth in both its userbase and ad revenue spending, the social networking site plans on expanding further with acquisitions, which it has speeded up in the last year or so. The purpose? Well there are many startups that are quite popular with users, Facebook can’t copy the ideas so what it does is simply make a purchase ad incorporate its features within the social network. I don’t need to go further; the $50 million acquisition of FriendFeed is one example and then the coming of Like, Share on status updates followed. Also came in talent, Bret Taylor who became a part of the Facebook team [its first CTO actually].

The idea is not just to acquire businesses, it is to gel in the brains as well to make Facebook feature rich. The purpose is to provide users more ways to remain glued to the platform with reasons to interact. Think of it, you might hate making friends and connecting virtually, but you will definitely adopt Facebook as a part of your campaign promotion strategy. You have got Fanpages, you have communities and over 500 million users who might get a sniff of your product. I am talking about the Like feature; it has the potential to make your idea or ad go viral in a second, another reason that equally allures marketers and advertisers alike.

The Future

That is one reason why big brands like Coca-Cola, Adidas AG, JP Morgan Chase and co and even P&G either hold high stakes or plan to invest more in Facebook ad budget. This is where the social network is getting a large amount of its revenue, putting aside many other businesses. The social network is not just about connecting, it recently passed over Yahoo as number one US site for display ads, its share climbing from 11 percent to 16 percent in first quarter current year].

Given all that, the revenue for 2010 is expected to double from the $700 Billion last year to over $1.4 Billion in 2010, a major boost in earnings.

Before I wrap it up, there is just one thing that is pulling down Facebook, its own strategy when it comes to privacy concerns. The social network hasn’t been able to rid itself of user accusations regarding the social network playing cat in the hat with their information, alleging that the network even sells this information to the public search engines [not confirmed]. I guess it will be interesting to follow up on Facebook and see how the social network grows further, both in terms of user base and more importantly doubling up its revenue. I am just unsure if the social network will actually opt for the IPO in 2012?

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