How does facebook generate revenue?

[tariq]

Its quite obvious that facebook earns a lot of income, I don't think a lot income comes from ads because facebook has few ads n ads are probably pay per click n not many people click on ads, so I just wanna know how the staff earn income from facebook..

[Robert]

Ads

[abraXus]

actually is really is the ads - they arent all pay per click - some are based on how much traffic they get, and they get a ton of it

[Jonathan Zerox]

Facebook Gifts:
Ever sent a virtual gift on someone's birthday? You must have at some point, if you knew how to use Facebook. Well you do pay for some of them and a big slice of it goes into coffers of the company. While simply writing 'happy birthday' suffices for some, the 'send a gift tab' on your friend's wall encourages others to send a virtual gift - paid for online. All the money almost always goes to the company, but if the gift is provided by an outsider, then a portion of it goes there. But much of it is still retained by the website.