Here we show the revenue model of Facebook. We do this based on two major streams.
-The Facebook user stream --> Here we see that there are three types of users: potential, simple and advanced.
-The Firm user stream --> Here we see that there are two types of firms: potential firms using Facebook and the actual firms who use Facebook as a way to advertize to their customers.
What we want to know is whether Facebook can make small investments that can result in a bigger Balance statement.
The stream of Facebook users divided in: potential users, simple Facebook users and Advanced Facebook users.
The rates in which pace a user can switch from different stages.
The firms that potentially use Facebook for advertisment and the actual firms that use Facebook to get in touch with their customers.
The rates in which pace the firms can change stage.
A mediator between the number of simple and advanced Facebook users and the transformation rate for firms to use Facebook to advertize.
The more advanced Facebook users there are, the higher this degree is, the more likely firms will shift to using Facebook as a way to advertize.
Revenue from simple and advanced Facebook users.
We assumed that Facebook earns around €2,- per advanced Facebook user through clicks, leads and %of sales
We assumed that Facebook earns around €0,25 per simple Facebook user through clicks, leads and %of sales
Revenue Facebook earns through firms that advertize on Facebook.
We assume that Facebook earns €10,- per firm that uses Facebook to advertize.
The balance statement of Facebook.
A few costs Facebook needs to make to keep running their business, ofcourse these are not all costs Facebook makes.
Investments Facebook can make to enhance the pace of the transformation between the stages of the users of Facebook.