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A Timeline of Facebook’s Monetization

From the start, Facebook’s (NASDAQ:FB) Mark Zuckerberg made it clear that his company had a social mission. In fact, he famously wrote to shareholders in the prospectus: “Simply put: we don’t build services to make money; we make money to build better services.”

And then … the IPO plunged (as I’m sure you recall). And since then, it seems safe to say that Zuckerberg has wisely changed his philosophy. After all, actions speak louder than words and Zuck hasn’t wasted much time when it comes to finding ways to boost monetization.

Wall Street has definitely taken notice, too. Since reaching $18 in early September, Facebook’s stock has rallied to $28.

With that in mind, let’s take a look at the timeline of recent moves from the social media giant to get monetization rolling:

June 6: “Sponsored Stories” — These are ad messages that appear on Facebook’s mobile app. While the initial roll-out was small, the company quickly turned it into a sizable business. Before the roll-out, sponsored stories were only available as part of a desktop/mobile package.

That approach seemed to result in lost revenue opportunities, but Facebook has since made up some ground. In the third quarter, about 14% of total revenues came from mobile sources. And on the conference call, Zuckerberg boasted: “We’ll monetize better on mobile than on desktop.”

June 15: Facebook Exchange — This drops cookies on a users’ desktop to track behavior off-Facebook and then retarget ads. Zuckerberg was never a fan of this approach … until after the IPO, that is.

Now, it looks like Facebook Exchange is likely to become a huge business. A similar program by rival Google (NASDAQ:GOOG) is, at least, generating billions from retargeting and tracking.

June 20: Payments — The original payments system was based on a new-fangled currency called Facebook credits, but it was often confusing to users and probably meant lower revenues. To improve things, Facebook introduced a dollar-based Payments platform.

It not only allows for microtransactions but also subscriptions, which could mean an opportunity to get recurring revenues.

Sept. 28: Facebook Gifts — This program came from the acquisition of Karma, which is a pioneer in the social gifting space. By being a part of Facebook, the gifting site is likely to get lots of traction, especially ahead of the Christmas season. Consider that the company has already lined-up an impressive group of merchants, which include biggies like Starbucks (NASDAQ:SBUX).

Oct. 9: “Collections” — Over the past year, Pinterest has quickly built a thriving social network. Facebook, though, has responded with its own alternative called Collections. It essentially allows users to pin colorful links on their profile pages.

More importantly, it could be a huge monetization opportunity. Facebook is focused on making it easy to post links about products from big names like Pottery Barn (NYSE:WSM), Limited Brands‘ (NYSE:LTD) Victoria’s Secret, Neiman Marcus and Fab.com.

Nov. 1: Classifieds — According to a post in BusinessInsider, Facebook is experimenting with this business. The classified business — while currently dominated by craigslist — could be ripe for a disruption, as the company has really not done much to update the service.

As for Facebook, it definitely has some advantages, such as massive data on over 1 billion users.

Nov. 16: Jobs Listings — This is another lucrative business, as seen with the success of LinkedIn (NYSE:LNKD). And again, it could be a natural add-on for Facebook. To this end, the company recently launched a Social Jobs Partnership App. Within the first couple days, it attracted about 1.7 million listings.

According to the National Association of Colleges & Employers, about half of employers use Facebook for hiring decisions.

Nov. 30: Gaming — Facebook and Zynga (NASDAQ:ZNGA) ended their strategic relationship. While it was a nice revenue generator over the years, it was starting to lose momentum, especially since Zynga has had a tougher time creating new hits.

Now, Facebook has more leeway to promote up-and-coming game developers. There should also be more opportunities on the mobile side, which provides around 60% of Facebook’s traffic.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.”  Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media, https://investorplace.com/ipm_ipo_pb/a-timeline-of-facebooks-monetization/.

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