by Erich Heinlein

Created on: November 07, 2011   Last Updated: November 30, 2011

Facebook, which is the world's largest and most popular social networking site brings in billions of dollars a year. The puzzling thing to the average mind is that Facebook does not charge it's users monthly to use the site. So how do they make their money? The money comes from multiple sources that seem obvious and others that are not so obvious. The first place Facebook makes it's money and where they make the most money is through their advertising revenue. There are multiple ways you can advertise on Facebook.

According to All Facebook.com, the most popular form of advertising is self serve advertising. It is exactly what it sounds like. You can go in and create your own ad for your business. The business ads that you see on the right hand of your Facebook page when you visit some of the sites on Facebook are the ones that are self serve. The best part? They are totally and completely controlled by you.

The other type of ad offered by Facebook is an engagement ad. It is not designed to announce weddings but to help users engage in the ad and it is generally used by bigger name advertisers.

The next way which Facebook makes money is through it's gift shop. Did you buy Virtual Flowers through Facebook's site for your significant other last year? If you did then you just made revenue for Facebook. When going to it's gift shop you can buy things like flowers, bibles, various types of food and more. While Facebook does make a moderate amount of money through it's gift shop, the gift shop is Facebook's weakest seller. However, it does have a history of doing good deeds with this part of their site. During the Haiti floods Facebook opened up it's site and made a special portion of it's gift shop specifically designed to contribute gifts to the citizens of Haiti as an act of good faith.

The last way that Facebook makes money is through it's credits which can be used through the virtual gift shop and other various place on Facebook. There has been testing as to how exactly Facebook is going to use it's credits program in the future. The biggest challenge with the credits program is by getting straight credits it requires a credit card. The problem is not all Facebook users have one. As a result Facebook is trying to come up with alternative ways to do it.

So how does Facebook make it's money? Through advertising, it's gift shop and by giving out credits. Now you learned something today.

All information came from allfacebook.com.

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