The Wall Street Journal
In the SEC filing for its initial public offering, Facebook revealed that 85 percent of its revenue in 2011 came from advertising to its 845 million monthly users. That includes ads bought by news organizations like The Washington Post, which purchased $4.2 million worth of ads last year and $9.6 million in the last three years, The Wall Street Journal reports. Facebook brought in $3.7 billion in revenue in 2011, including about 12 percent from game maker Zynga, responsible for FarmVille. Reuters technology and media editor Peter Lauria points out:
At upwards of 85% of revenue, #Facebook is more dependent on advertising revenue than CBS, the most ad-dependent old media firm..
— Peter Lauria (@peterlauria3) February 1, 2012
There’s an additional problem with that revenue, the Journal reports: “Relatively few people click on Facebook ads, which is a traditional way online advertisers measure the effectiveness of Web ads. Facebook may need to boost this ‘click through rate’ to convince companies to spend more money pitching their wares on Facebook.” In the filing, Facebook names Google as one of its primary competitive threats. Google gets 96 percent of its revenue from advertising, reports the Associated Press. | Related: Facebook’s value is in eyeballs, not personal data (CJR) | The Washington Post’s Don Graham has $46 million in Facebook stock (Forbes)