How Facebook Can Become a Money Making Machine

Social networks have truly come of age in the last year. No longer viewed as lonely outposts for youthful college slackers, the reach of these platforms has grown exponentially. Today, more than two-thirds of the world’s Internet users visit the social networking sites that reel in billions of eyeballs every 24 hours.

Yet, despite the staggering growth of social networking, determining how to monetize social media platforms remains a tough code to crack for even the savviest of companies. As such, identifying new revenue models will be instrumental in kicking off the next cycle of the social networking phenomenon in 2010.

If Anyone Can Do It, Facebook Can

Facebook (Facebook), social networking’s acknowledged leader, has surpassed every platform on the market today, corralling more than 350 million unique users globally. If any social network is poised to design a winning formula for successful revenue streams in 2010, it’s Facebook. CEO Mark Zuckerberg has set an aggressive agenda for the company, publically stating that he “expects social networks to become as essential as web browsers and operating systems,” and he has set the lofty — yet entirely realistic — goal of 1 billion users worldwide.

In the less than five years since it expanded beyond scholastic audiences, Facebook has not only grabbed the lion’s share of users, it has engaged them like no other platform on the Internet. The average Facebook user visits the site at least once a day and spends an astounding 55 minutes engaging friends and family –- statistics that another Zucker (Jeff) would probably kill for over at NBC.

While translating such popularity into dollars and cents isn’t easy –- especially in an industry whose users have grown accustomed to getting something for nothing –- Facebook could potentially provide a monetization template that would revolutionize social networking as we know it.

The Next Level of Advertising Revenue

Advertising has traditionally provided the simplest means of generating revenue. PricewaterhouseCoopers reported in October that Internet advertising revenues totaled $10.9 billion for the first half of 2009. It’s been estimated that Facebook alone took in $435 million of that total. But for a site with nearly half a billion users, a quarter of which spend more time within the network than watching television, these numbers represent just the beginning potential.

First, Facebook needs to admit to itself that it is in the business of selling ads. By better managing its advertising network, intelligently expanding its marketing options, and developing workable social ads that leverage the branding power of friends and connections, Facebook can begin to capture its rightful share of online ad revenues. The final piece is to increase awareness and understanding of Facebook ads among corporate decision makers.

For example, every executive in America today understands the value of purchasing Google (Google) ads –- and that didn’t happen by accident. Google understood that what caused it to dominate online search wasn’t going to ultimately position the company as a global corporate powerhouse valued at nearly $200 billion. Google’s aggressive marketing, communications, and lobbying shops have worked to ensure every ad buyer, political campaign, marketing executive, and public relations flack knows the value of the service and has direct and easy access to account executives who explain the much worshiped “ROI” Google ads provide.

Today, Facebook stands on the precipice Google inhabited just before it became a top money-maker. By taking a page from the Google playbook, and aggressively marketing — and explaining — its power to influence buying decisions, Facebook ads could become as essential to 21st Century marketing as the yellow pages were in the 20th Century.