Facebook is more than a fun place to stalk people: It’s a history of my life, and the basis of my social life. I plan just about every organized social activity on it—in fact, I would have a hard time throwing a party or even just finding things to do on the weekend without it.
This is True
The above quote is pulled from Simone Foxman’s recent Quartz article, “Facebook is a goldmine in the making.” I think Simone nails the reason why Facebook isn’t going anywhere, but both she and her colleague, Chris Mims, who wrote the counter argument, “Why Facebook will never make a significant profit,’ miss what I think will be the main source of Facebook’s revenue in the future, retail.
Why dabble in a $30 million dollar advertising market instead of tackling a $200 million dollar Ecommerce market? Answer: There is no good reason to. Facebook has already dumped a good chunk of its inventory into an ad exchange, automatically cheapening the rest of its shit ad inventory, but making its remnant inventory easier to sell without a direct sales rep. This is happening as the company takes baby steps into the Ecommerce world. Gifts are just the beginning and, even if not a cash cow right now, remember, Facebook will be sticking around for a while. Sooner or later, Facebook will figure Ecommerce out.
In 2016, the digital advertising industry is expected to be a $55 million dollar industry while Ecommerce is expected to hit $361 million. If you’re Zuck, the decision as to which one to focus on is easy. We should all expect to see Facebook change to facilitate that move, and yes, they’re going to make plenty of money because of it.