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The Art of Making Money By Tetyana Samoylenko BUS 550 Professor Minder Chen.

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1 The Art of Making Money By Tetyana Samoylenko BUS 550 Professor Minder Chen

2 From Its Dorm-room Days: Simple, clean, and uncluttered Elegant interface design Zuckerbergs preference for minimalism New sort of communication based on real relationship Improve peoples lives, especially socially

3 Revenues – non-existent in its first 2 weeks June: $10 million offer at 20 y.o. Saverin and $10,000 Y2M – ads for college newspaper websites. 30% comission. Sceptical Mastercard Y2m wants to invest

4 Zuckebergs vision – We are going to change the world Zuckerbergs terms – We dont like these either but they pay the bills Serious business – must keep growth Obsession with technology – decide when to turn on new schools Open-source software – key factor in early success. Exponential growth in the next few years more than half the sites users were outside the United States Universal appeal – all text is in English

5 Providing service to people all over the world was expensive No revenue from more than half its users Advertising deal with Microsoft – applied only in the US Microsoft is interested in becoming a partner to advertise outside the US Microsoft had exclusive right to sell banner advertising

6 Facebook needed its own self-managed streams of revenue Time to raise capital Google is interested Microsoft - $240 million at a $15 billion valuation at 1.6 % of the company Li Ka-Shing – Asias Warren Buffet - $60 million for 0.4% of the company Perfect timing recession

7 In addition to the initial $300 million - Asias Warren Buffet invested $60 million more several months later Three Munich-based venture capitalists invested $15 million Total raised in the series D round - $375 million

8 Microsoft – no longer an obstacle New sort of advertising Any commercial entity could create a page for free. It had an individuals model including ability to host applications The strategy – get as many companies into its systems as possible A user can become a fan rather than a friend Activities would be broadcast to their friends News Feeds

9 Poorly designed alert device Intended for playing games, adding a recipe, and announce purchases you made on partner sites Major design flaw Who is this ring for? Disrupted relationships Christmas surprise Redesigned Beacon with opt-in system

10 Senior executive at Google Perfect candidate for COO Companys top advertising champion and sales person Immense experience with advertisers from Google How to social success into a lasting money- making business? Series of meetings to clarify the business strategy

11 Things people had already decided they wanted to buy Response to the word you typed in to the search box: fulfills demand Help people decide what they wanted Generate demand Implant a new idea into your brain – you should want to spend money on this thing

12 Solution for large brand advertisers Brand Lift enables large brand to test effectiveness of their advertising campaign almost immediately Users can interact with advertisers First year – close to $100 million in revenue $5 per thousand views for these adds

13 Smaller advertisers with a credit card Ads are displayed in the side bar of most pages of the site including user profile, events, groups, and the third-party application Small businesses – doctors, lawyers, restaurants Estimated revenue in 2010 $450 million


15 Send virtual gifts to one another $1 per gift - $30 million 2009 Third-party developers to increase variety of products sold Discontinued in August, 2010

16 Credits are used to buy virtual goods FarmVille, CityVille, CafeWorld 150 developers in more than 350 applications Developers must pay a 30% cut whenever online game players use the virtual money Sandberg: 20-30% of revenue will come from the sale of virtual good or operations of an on- site currency


18 Prior to becoming COO at Facebook Sheryl Sandberg worked for which search engine giant?

19 1. Should Facebook go public? Why? 2. What would happen when individuals and companies become more comfortable with the idea of accepting virtual currencies in exchange for various types of interactions, goods or services.

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