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+--- Thread: Why are some free websites worth so much money? (/thread-67688.html)
Why are some free websites worth so much money? - yoyoyoyoyoyoyoyoyoyo - 03-27-2013 06:44 AM
Why are some websites worth so much money?
For example, Facebook is worth approximately $17 billion. How is this possible? If users are not paying for anything to use the site, how does Facebook make money? I know they can make money off of advertisements but certainly not $17 billion worth.
Anyone care to explain?
- Zack - 03-27-2013 06:52 AM
Websites such as myspace and facebook are worth so much because sponsors pay the site to use their advertisements to attract people to whatever they are trying to sell. And for sites with 100 million users, many people will notice these ads.
- awigo50 - 03-27-2013 06:52 AM
Facebook has millions of active users. This base creates plenty of ad revenues. The company may not make 17 billion a year, but it may make 5 or 10% of that. So people will pay 17 billion for it based on how much the site is making now, and get a return on their investment. They might also include the possibility for future growth in site size, and therefore revenues.
Ad revenues are fairly good money if your site has a large number of visitors.