Facebook Reveals How It Makes Money

Dec 22, 2011

Facebook added a note to the top of Facebook that asks, "Ever wonder how Facebook makes money?" and then invites users to click for more details. The link connects users to a new "About Advertising on Facebook" page, which lists the steps Facebook takes to deliver ads to pages:

1. A business creates an ad
2. Facebook gets paid to deliver the ad
3. The right people see the ad

While oversimplified, the transparent approach is a rare one for the social giant. The page explains that ads are necessary to keep Facebook up and running and free, and also includes some FAQs. Facebook may be generating awareness about its ad strategy in order to prepare its users for the Sponsored Stories ads set to move from the right sidebar into users' news feeds in 2012.