Facebook is in BIG trouble.
Why should that matter to you?
Because if you’re trying to get a web-presence and you plan
to advertise to Facebook users, then Facebook’s problems just became your expensive
Over the past few weeks I’ve been studying the most popular
sites of the web…their business models, their finances, and more.
I’m about to build mass-market website of my own. And I want
to avoid any mistakes others before me have made.
Here’s what I found:
Only few social networks are getting a decent return on
investment; with all the venture capital funding, and after years of work, most
aren’t even profitable and some haven’t even figured out their REVENUE model
Facebook is one of the worst.
Their web business-model is called the “entertainment/information
model”. It’s one of three ways businesses make money online.
Here’s how it works:
A website starts some useful or entertaining service for
free. Then they build a giant user-base. Meanwhile, the business translates to
money by selling the attention of the user-base to BUSINESS OWNERS (like you)
who want to sell stuff.
In effect, such websites are intermediaries who look like “good
guys” to milllions of users, while indirectly taking money from them through
Facebook’s financials show that out of billlions of dollars in
revenue per quarter, they only see a few milllion in net profit after taxes.
Meaning their business is HEAVY on running costs.
So regardless of how popular Facebook is with its gajillion user
profiles, they just can’t seem to sell enough advertising to recover a decent
profit to make it worth their while.
They can’t make enough money from their ad program.
Shouldn’t they be killing it?
Doesn’t just about everyone on earth own a Facebook account,
and shouldn’t EVERY business owner be banging down Facebook’s door wanting to
reach their audience?
But Facebook got its venture capital funding based on how
engaging their site is
Facebook users spend an average of x hours a day using it.
They have so-and-so percent “return visitors” vs “new
And have a so-and-so rate of new profiles.
Meaning, Facebook and its investors think Facebook’s biggest
advantage is that they keep users ON their platform and returning to their
Compare to Google on the other hand.
Google uses a similar “information/entertainment” business
model as Facebook.
They give free services to their users too.
They make the bulk of their money by selling advertising to
businesses (like yours) too.
And even Google’s revenue is comparable to Facebook’s.
But when it comes to profit, Google keeps a lot more after
taxes–In the range of billlions, not milllions!
So Google is nowhere near as heavy as Facebook in operating
Because Google’s “success metrics” are the exact OPPOSITE of
They have a searchable directory listing. They consider
themselves to have successfully delivered a useful service if they send users
OFF their website as quickly as possible.
While Google has a high number of “return visitors”, Google
intentionally tries to reduce the frequency of quick repeat visits.
Do you see where I’m going with this?
Google’s search sends people AWAY from Google and they
intentionally keep their site as UN-interesting as possible. Heck look at how PLAIN their homepage is.
Google constantly gets BETTER at making people DISAPPEAR
into advertised websites.
They don’t want you, nor do they need users to stay on Google. The money is in sending them away.
Users of Google arrive to Google’s site, run their search,
and are out of there in SECONDS.
Unlike Facebook…People come to Facebook get so wrapped up in it, theystay for hours.
So why does this make Google more profitable, and their
business model so much stronger than Facebook’s?
Because advertisers (like you) DON’T CARE how long people
spend on Google.
You care about how long users spend at YOUR website.
The more willing and the quicker a person leaves Google’s (or
Facebook’s) website when they discover your website, the more profitable it is
You make more money.
Which means you are more willing to advertise again and
again with them.
Who would you prefer?
Google’s users, who search, see your ad, click it and stay
on your website…
Or Facebook’s, who enjoy using Facebook soooo much that if
they happen to click your ad and reach your website…they lose the chat window
they’re talking to their buddies in…and QUICKLY race to hit “back” before they
even look past your header?
Me? I’d pick Google.
Or Bing or Yahoo…or any other website that isn’t so gad dang
interesting to its users.
And so should you, especially if you use the amazing Pay-Per-Click
advertising model to promote your products and services. Where you’re always
paying for useful clicks, not access.
Before you race off to write a Google ad, at least learn to
do it right. Use the Traffic KickStart method. More on that, here:
If you don’t learn KickStart, you will probably turn even
Google’s traffic into a watered down, expensive version of Facebook’s losing ad
program. (I mean Facebook can’t even make a profit from their user-base, why
Stick with Google, Bing, or Yahoo…and Traffic KickStart. It’s
a combo made in heaven.
The most powerful, fastest, most effective, most profitable,
and easiest traffic generation technique ever invented.
Learn it today. And I’ll see you inside!