Valleywag got its hands on Facebook’s rate card.
It is nice to see that, besides the MSFT deal, sponsorships drive Facebook’s revenue. The problem is that Facebook’s implicit valuation has gone up so much that it needs really strong revenues to justify that market cap as it gets older.
We’ve said that:
- Yahoo! became king of the world wide by mastering the art of selling display banners on CPM rates, in other words, by making pennies off each impression.
- Google overtook Yahoo! by mastering the art of selling text links on CPC rates, in other words, making tens of cents off each click.
History not only repeats itself, it also tends to provide a glimpse into where the spectrum will take us. If the latter is true, then Facebook needs to harness the power of CPA offers, connecting consumers and merchants to take a slice off leads, sales and introduction. If it does that, it will make a few dollars of each connection.
Fitting, since we’ve dubbed Facebook the Database of Connections… but as the easy money will come in between MSFT’s guaranteed revenue and fixed fee sponsorship, maybe Facebook won’t have the stomach to give up the low hanging fruit in order to aim for the billion dollar streams beyond the proverbial fence.
Tags: Facebook.com|
Posted By: Ashkan Karbasfrooshan | Jul 30th
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