Facebook Makes Changes to Boost Revenues

After its disastrous IPO, the company seems to be getting serious about monetization

A big criticism of Facebook (NASDAQ:FB) has been its lackadaisical attitude about monetization. But it seems the company has changed its tune. (Perhaps the plunge in the stock price was a wake-up call?)

So this week, Facebook announced important changes to its Payments platform that should help boost revenues.

Originally, the system was based on credits that were denominated in the U.S. currency. But this was a hassle for customers in other countries (which represent the main growth opportunity for Facebook). So now Payments will available in foreign currencies.

What’s more, the system will be able to charge subscriptions. This has become a normal way for Internet users to buy apps. More importantly, it can be a nice recurring source of revenues.

According to the S-1, Facebook got about 18% of its revenues from Payments in the first quarter. (The company takes a 30% cut of the gross.) But much of it has come from Zynga (NASDAQ:ZNGA).

So by expanding the program, Facebook now has an opportunity boost its monetization. Besides, with the expected decline in advertising revenues because of the shift to mobile traffic, Facebook’s Payments platform could prove to be a crucial stabilizing factor.

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 the upcoming book How to Create the Next Facebook: Seeing Your Startup Through, from Idea to IPO.  Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.

Article printed from InvestorPlace Media, https://investorplace.com/ipm_ipo_pb/facebook-makes-changes-to-boost-revenues/.

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