by Marcel Weiß
With Facebook's planned IPO, for the first time one gets a deeper look into the social network with its 850 million users thanks to the S-1 Registration Statement.
What's especially interesting is the fact that apart from the naturally strong advertising business, the web currency Facebook Credits already accounts for 15% of the Facebook revenue, as we have already reported in our Extras:
"Facebook Credits are almost exclusively used for the retail of virtual goods. As long as Facebook maintains its 30% service fee on every transaction, this is not likely to change soon.
However, the market potential is too big for Facebook to ignore. For instance, fraud could be strongly minimised if Facebook used the social graph data for reputation management." (our translation)
For Exciting Commerce readers, this should not come as a big surprise: We keep saying that it does not make a lot of sense to integrate an online shop into a Facebook app 1:1 (also read "Wie banal kann E-Commerce in Facebook werden").
It's not about uninspired shop apps but rather about the clever usage of the new interconnections and the data that are generated via the Open Graph (see also "Soziale Filter: Wie Facebook den Webshop befruchten kann")
E-Commerce and Facebook can work together by all means, however, apparently it will take a while until we will see the first breakthroughs in this segment.
Not surprisingly, Facebook is very dependant on the social gaming star Zynga (Farmville, etc.). Those games accounted for 12 percent of the Facebook revenue. AllThingsD:
"Facebook said [in its SEC filing] that Zynga accounted for approximately 12 percent of the company’s revenue last year when Facebook’s revenues totaled $3.7 billion.
The revenue came from both its 30 percent payments processing fee related to the sale of virtual goods from games, such as FarmVille and Words With Friends, but also from advertising purchased by Zynga.
Additionally, Facebook said Zynga’s apps generate a large number of pages on which it displays ads from other advertisers."
This is interesting for a number of reasons. Often, with regard to (web) platforms, it is stressed how app providers can become too dependant on platforms. In rare cases it is mentioned that also the platforms themselves become more or less dependant on the app providers. But: Zynga makes about 93% of its revenue with Facebook.
What's also interesting for everybody who at least partly builds his business on the Facebook platform: founder Mark Zuckerberg will keep control of the company after its IPO. Thus, continuity regarding strategic decisons will be maintained. For those who have read "The Facebook Effect", Zuckerberg's persistent control is not surprising.
Regarding the general assessment of Facebook's business figures, we recommend the Business Insider Analysis by Henry Blodget.
Earlier posts on this subject:
- Facebook-Neuerungen werden völlig neue Wege in der Personalisierung ermöglichen (German)
- F8 Highlights: Facebook aktiviert sein Langzeitgedächtnis (German)
- Wie banal kann E-Commerce in Facebook werden? (German)
- Getestet: Wie nun auch Amazon Facebook integriert (German)
- Warum auch Facebooks "Groupon Killer" zum Scheitern verurteilt war (German)