I recently discovered that Reddit is not yet profitable. This was surprising to me considering the fact that Reddit has more than 200 million monthly users and billions of pageviews yearly.
I can’t even…. How does a website pull that kind of traffic and not be profitable? Reddit was founded June 2005, making it just over a decade old. I mean, a 10 year old baby that still can’t walk….
Like my parents used to say when I screwed up bad, “go and look at your mates and see how they are doing it, do they have two heads?” So, how do other popular websites (and internet traffic hogs) make money? Well, let’s see shall we?
Facebook’s major source of revenue is advertising: the little ads on the right side of the Facebook page.
Just to give you an idea how big this business is, in the first three months of 2012 alone, Facebook sold $872 million worth of advertising. The other source of “income” comes from selling Facebook credits in their games. Yeah, those Candy Crush requests? Some people actually pay for stuff in those games. Who knew?
Google [Alphabet if we’re being technical]
Google’s number one source of revenue is advertising, across most of its web and tech products. Yes, you’re accessing majority of their services like Youtube, Search and Maps for free, but in exchange, Google gets your personal details as well as your internet habits which forms the backbone of their advertising model – Google AdWords and Google AdSense.
Hmmm, I guess that’s why that ad for viagra keeps following me around the internet – because I googled “performance enhancer”. Err… excuse me.
The Facebook for job seekers (to put it crudely). LinkedIn has a three pronged revenue model that helps it stay afloat – advertising, subscriptions to its premium service and selling data – companies and recruiters actually pay LinkedIn to gain access to their database. And yes, it’s now a profitable company.
Mozilla
This isn’t a website per se but every time you open a new tab in Mozilla Firefox, technically speaking, you are on the Mozilla page, sort of. Anyway, before I get hounded that Mozilla is a non profit, The Mozilla Corporation is the for-profit section of company. And the majority of its revenue comes from royalties paid by search engines. And a huge chunk of that comes from Google.
To put this in perspective, by default, if you type your search query directly into Firefox’s address bar, you’ll get search results from Yahoo. Yahoo pays Mozilla for that. You could always change the default search engine to Google… which we all do, right?
I still find it weird that a company without a physical, tangible product could make it to IPO, and on the New York Stock Exchange for that matter. But that’s the beauty of the 21st century. Anyways, about 89% of Twitter’s revenue is from advertising (In Q1 2015, Twitter reported its advertising business brought in $388 million in revenue). But unlike Facebook, this isn’t so straightforward.
There are three ways to advertise on Twitter: promoting a tweet that will appear in people’s timelines, promoting a person/company account, or promoting a trend. I’m sure if you go to Twitter right now, you’ll find all three examples on display.
So, there. Just in case you were wondering.
Photo Credit: theloushe via Compfight cc
