Facebook, which recently changed its name to Meta to assert its focus on Metaverse, is one of the biggest tech companies in the world at the moment.
Since most people still refer to a company like Facebook, I will be using that name instead of Meta in this article. One might think that Meta (Facebook) has a monopoly on essential technological products, but that is not the case.
However, Facebook is undoubtedly more popular and profitable than its competitors. In our previous articles, we have satisfied the curiosity of our readers by addressing how the most famous social media platforms like Twitter, Telegram, and Snapchat make their money.
Facebook is undoubtedly one of the most wealthy tech companies globally, with a net value of billions of dollars.
Unlike most social media companies, Facebook makes money from its services and those of its junior companies like Instagram and WhatsApp.
Out of its $86 billion revenue coup in the previous year, advertisements played a significant role in making that possible. The rest were gotten from the sale of Oculus and VR products made by the company.
Table of Contents
What Is Facebook?
Facebook is a social media site created by Mark Zuckerberg and several other friends in their Harvard dormitory in 2004.
The company has since grown to become one of the most significant and most valuable tech companies in the world while acquiring other tech companies in the process.
Facebook is currently one of the wealthiest tech companies globally, and we will be seeing how it makes its money shortly.
How Does Facebook Make Its Money?
Facebook has several streams of income. Below are some of those sources.
Advertising
Facebook auctions off advertising spaces within itself and its junior company, Instagram. Advertising is the most significant source of revenue for Facebook, and it accounted for over 90% of the previous year’s income.
The advertising is made possible through the personal data that Facebook collects on its millions of users, allowing it to know the kind of ad to show to each person.
Facebook Payments
This allows Facebook to generate revenue through payments. It is similar to a peer-to-peer payment system, just like Venmo.
Jibbigo
This is one of the tech companies that Facebook acquired in 2013 as it kept growing.
This language translation app allows Facebook posts and chats to get translated into different languages.
It allows companies to advertise their products in different languages, and they pay Facebook for this service.
Atlas Solutions
Facebook also purchased this in 2013 from Microsoft, and it enables advertisers to monitor their social media reach effectively and efficiently.
Facebook also makes money from its junior companies like Instagram through various ads and posts promotions.
Instagram, the photo-sharing app, was acquired by Facebook in 2012 for a reported $1 billion, and it has over 400 million active users daily.
Although Instagram is not one of the biggest revenue generators for Facebook, tech expert experts expect that to change in the coming years.
Oculus VR
This is one of the tech products offered by Facebook. Facebook purchased it for $2 billion in 2014. With this acquisition, Facebook took a bold step into the world of virtual reality technology.
WhatsApp was perhaps facebook’s most expensive acquisition of 2014 after it splurged over $19 billion to acquire the chat messaging app.
WhatsApp is now the most popular messaging app globally, with millions of active users daily. WhatsApp does not sell ads, but Facebook can draw revenue from the WhatsApp business app, designed specifically for businesses to interact with their customers.
Conclusion
So now you know how Facebook makes its money from various revenue streams and junior companies. Facebook is one of the most valuable tech companies globally, and this article has shown just how it got there by acquiring companies along the way.
