Facebook Continues to Expand Its Business Model

As the undisputed king of social media, it would seem like Facebook has little room for expansion in the realm of online networking. But the company continues to rollout new innovations to stay ahead of competitors, and recently Facebook has even begun to branch into other industries as well. Nobody knows for sure what the ultimate goal of Mark Zuckerberg and the team at Facebook is—aside from astronomical profits, of course—but industry insiders are now talking of a burgeoning battle between Facebook, Google and Apple for supremacy in the online marketplace and beyond.

At first blush it may not seem like these companies would be in competition with one another, but as the internet, phones, TV and other technologies are combined into a homogenous mix, it’s difficult to tell where one industry ends and another begins. One of the common grounds where all three companies thrive is advertising.

Through integration with their network and utilizing user’s information, Facebook has been able to create targeted ads which generate a greater response and are more effective than traditional methods like banners and search ads. In 2010 alone, Facebook is expected to bring in $1.4 billion from online ad revenue. Facebook has recently found other ways to capitalize on the immense popularity of their flagship site.

Over a year ago, Facebook introduced Credits as way for people to use their real, hard-earned dollars to invest in virtual products for popular online games like FarmVille and Mafia Wars. Selling fictional goods for actual money may seem like a shoddy venture, but try telling that to Facebook, which is expected to rake in over $835 million from the program this year.

It appears that Facebook may even be primed to make a leap from the online marketplace into tangible goods. According to an article from, Facebook has two different phones in that are currently in development. Predictably, both phones are rumored to heavily feature Facebook’s current social networking service. Some say that Facebook is simply creating the software while a third party develops the hardware, but either way it is a definitive shift from what has been the company’s core product line up to this point.

Understandably, many people are beginning to question whether or not Facebook is acting ethically, and if they are, whether they can continue to do so moving into the future. With a glut of personal information from it’s more than 500 million users, Facebook certainly has a wealth of data and an amazing financial incentive to put it to use. However, Mark Zuckerberg has been working ardently to maintain Facebook’s solid public standing. He is constantly addressing privacy concerns with the site, a task that is seemingly never-ending. In addition, he has also recently pledged $100 million to create Startup: Education, a program designed to improve education in throughout the US.

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