
How exactly is Facebook making money? - nreece
http://www.guardian.co.uk/technology/blog/2009/sep/16/facebook-money
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Goladus
_nobody ever thought ringtones could be so profitable._

Of course it's profitable. It's fraudulent. Telecoms deliberately crippled
technology and deceived consumers into thinking that downloading and uploading
ringtones to your phone wasn't trivially easy.

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axod
You have an odd definition of fraudulent.

* Some people don't know how to put ringtones on their phone. Maybe their phone can only accept over the air ringtones unless they buy a special cable.

* Companies provide a service to send people ringtones.

* Both parties are happy

The (some might say) fraudulent bit is companies that get users to sign up to
an automated subscription payment to get ringtones - eg "Get a free ringtone
when you sign up" (Small print: subscription costs £3/month and allows you up
to 5 ringtones per month).

~~~
run4yourlives
I think he means that most cell phone providers have disabled or crippled
interfaces that you can use to install ring tones without having to download
them over the cell network.

It may not exactly be fraudulent, but it certainly isn't very ethical business
practice.

That being said, I _do_ think it's borderline fraud to bind the phone to the
service provider as is common in the North America. Could you imagine if this
was done for landlines? I suppose if they continue to subsidise the phone they
can get away with it, but again, not ethical practice IMO.

~~~
axod
>> most cell phone providers have disabled or crippled interfaces that you can
use to install ring tones without having to download them over the cell
network.

I'd say that's likely incompetence rather than malice.

~~~
run4yourlives
It's not incompetence when done deliberately.

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jwesley
Ringtones are also notoriously the subject of rebilling scams. Download
ringtones for $.99! Get charged $20 per month automatically for the rest of
you life or until you notice and cancel.

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jgrahamc
I don't have much respect for the author since he gets in a tizzy about the
phrase "free cash flow positive" and seems confused about what it means.

~~~
ivankirigin
Indeed. This article is a like someone looking at the housing crisis who
doesn't understand what an adjustable rate mortgage is.

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seshagiric
I think it won't be long before Facebook enables people sell stuff from their
facebook page. Like posting custom design t-shirt designs etc.

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FreeRadical
this is already possible via shopit and other similar gadgets

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aichcon
Yes, but the point is that it would be done on Facebook, whose user base is
much larger and more connected.

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leecho0
I'm curious... apps on facebook make money, right? slide, playfish, zygna,
etc. So what happens if an app maker hits jackpot, while facebook itself can't
find a good revenue stream? Is facebook going to start a facebook tax?

~~~
unalone
Facebook is profitable.

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c00p3r
There are no question, it is so obvious - they make money by selling user's
data to advertisers. What exactly they are doing - extracting a keywords form
profiles, creating tag clouds from conversations or perform a statistical
analysis - it doesn't matter. Data = money.

~~~
axod
Is this a bad thing? I'd love adverts that were actually relevant to what I
want. Why do I care if an advertiser knows I like cheese because I posted I
like cheese on my profile once?

"Selling user data" is pretty simplistic and puts a negative spin on it.
They're not selling your credit card details or your contact details so 3rd
parties can spam you. They're trying to give you relevant adverts based on
your likes and dislikes.

~~~
unalone
Somebody else commented a week ago saying that they thought it would be
brilliant for Facebook to lease their ads the way Google does adsense. I know
that I've clicked more Facebook ads than I've clicked any other advertisements
I've seen.

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sosha
CIA Facebook collects more intelligence than all agencies combined!

They give access of their databases to CIA and make a killing!

Sound business plan!

