Is Facebook going to monetize the non-core businesses in the future?
The other businesses of Facebook are going quite slower. The advertising revenues of Facebook showed an increase of about 67% in the last quarter over a year. However, the other businesses, fees and other payments showed a growth of about $214 million to around $234 million. The rate of growth was about 9% in the same time period. The users buy digital and virtual goods from the developers which produce variant applications on Facebook. Facebook gets fee from the developers at the time when the users of these applications pay through the interface of payments.
The revenues from Facebook marketing have shown a significant growth over time. The business makes a contribution of about 92% to the overall revenues of Facebook.
The company’s management, in the conference call, said that most of the revenue from the business payments has been received from games. However, the revenues which are related to the payments usually come from personal computers. It is a fact that personal computers are facing a significant decline as more people tend to use mobile devices or laptops these days. This is why; the payment business of Facebook is showing a very slow growth.
Facebook also made a lot of acquisitions in the last year. The acquisitions of the company incorporate instant messaging applications on mobile phones like WhatsApp. This acquisition has been done for about $19 billion. It also made an acquisition of Oculus VR for about $2 billion. It also acquired Instagram application for about $1 billion.
The report stated by Facebook states that WhatsApp had around 419 million users in four years of its working as compared with 145 million users of Facebook. Google had 123 million users and Twitter’s users were estimated to be around 54 million. The users of Microsoft and Skype were around 52 million. This shows that WhatsApp has got a very large potential of monetizing the base of users through subscriptions and marketing. This is why, Facebook as ready to make payments of around $19 billion for acquiring WhatsApp.
The non-core businesses of Facebook like Oculus, WhatsApp, Gaming and Instagram are not expected to provide returns of material to the company soon enough. Then there are applications like Internet.org, video advertisement businesses and Messengers which are also showing growth from the period of infancy. It is expected that these apps are going to be used by maximum number of users over a period of time.
Presently, Facebook is not earning a lot of money from its other businesses and acquisitions. Their slow growth is the main reason behind these declined earnings. However, in case Facebook succeeds in monetizing the businesses in a faster way, it would be able to get maximum benefits from the funds of exchange like DJ Internet Index Fund. This fund has a very high exposure to the social media network. Sooner or later, Facebook is going to earn huge money out of these businesses.