A recent report from eMarketer says Facebook's total revenue, which includes advertising and other sources — such as Facebook Credits — is expected to hit US $4.27 billion this year. That's more than double the US$ 2 billion that the social networking giant is estimated to have earned in 2010.
A closer look at the report reveals that Facebook’s advertising revenue is estimated to rise to US$ 3.8 billion. This number is actually a decrease from eMarketer's last Facebook revenue estimate for 2011, which predicted advertising revenues would hit US $4.05 billion.
Despite this dip, the company still expects the social networking giant to thrive.
“This slight revision downward for 2011 should not be taken as a sign that Facebook’s overall business is losing momentum,” said Debra Aho Williamson, eMarketer principal analyst. “Facebook’s revenue streams will continue to diversify, with ads representing a decreasing proportion of total revenue while other sources, such as Facebook Credits, will grow.”
Williamson's statement is further reflected in the numbers, as Facebook's advertising revenue makes up 89 percent of its total— down from 95 percent in 2009.
While these numbers all check out positively, Facebook isn't getting a moment to relax. That is, the platform will continue to have to prove to advertisers that its products are worth the trouble.
“Even though Facebook has spent several years wooing marketers, many of them still believe the ads aren’t effective at driving clicks and other actions,” continued Williamson. “Facebook must either work to improve its clickthrough rate or show advertisers that advertising on the site is effective even without a click or other action.”
Interestingly, Williamson also noted the trending belief that marketers can successfully engage with consumers via little to no-cost tools, such as Likes. “This may especially be the case for companies that market to Facebook’s younger users, because they tend to be more willing to ‘like’ or comment on brand pages.”
The company made yet another change to its platform which rolled out to the majority of users today and yesterday. Now, the most interesting posts from friends, such as photos and status updates, are placed at the top of the News Feed. And a new “ticker” feature makes it easy to see activity.