From The Wall Street Jornal:
As far as I can tell, Facebook doesn’t sell anything, and it doesn’t take advertising, so where does all this money come from?
um, “doesnt take advertising?” in what universe? What do you think “Sponsored links” are in the right hand column?
They sell a ton of advertising (turn off adblock). Also, they sell access to your info (email address, likes, location etc). On top of that, I believe facebook users can purchase things from facebook to put on peoples walls, but I could be wrong since I’ve never done that.
On my page I can’t see any advertising. Where is it? I can’t see any sponsored links.
Turn off adblock.
OK, I’ve done that, and all I get is ‘sponsored’, ‘Create an advert’ and ‘Grow your business’, but no actual adverts.
Also, they get money from the game companies that run Farmville, etc - apparently 30% of all the money players spend on credits to buy games stuff.
Edited: Under Sponsored, mine has an ad for The Oscars broadcast on ABC. That’s an ad. Is there something under “sponsored” on your page?
Only ‘Grow your business by promoting it on Facebook. Click here to explore how to reach your customers with a social ad.’
Back to your question though, they make an asston of money in advertising:
The biggest income stream seems to have been performance advertising, which likely accounted for more than half of Facebook’s 2009 revenues at $350 million. Next was brand-based advertising, which accounted for an estimated $225 million in revenue. Microsoft advertising came in at $50 million and virtual goods income was only $10 million according to these numbers.
Bloomberg says their revenues for 2010 were closer to $2 billion, and the article delves into some of the specifics about ad revenues.
Thank you: that’s interesting.
Interesting. I just tried turning off Adblock and I didn’t see any ads either when my “Newsfeed” was showing. I looked at my Profile and got a whole bunch. So, I guess my answer would be - turn off Adblock and then poke around. You should start seeing them.
Thanks, but I don’t think I’ll bother. 
I’m not surprised. 
Your comments just made me curious.
Somewhere there is a lonely group of attractive young women, with breasts the size of basketballs, who are clamoring for the attentions of a 50 something men who use Facebook. At least that’s what they are telling me.
I’m guessing most of the cash comes from them because they advertise like nobody’s business on Facebook. Maybe they are angling for breast reductions?
It’s hard not to feel sorry for them. Shunned by society for their pontoon like breasts. Can’t buy cute outfits like the rest of the girls. Must have all their clothes custom made. Need special dining tables with cutouts. Sounds like a hell of a life.
Profit ~= revenue–those two articles are completely consistent … OTOH, net profit $500 million on revenues of $2 billion = 25% net profit margin = happy times for the company owners. If they maintain that level of profitability, they will seriously rake in cash in the IPO, assuming they move ahead with one.
I’m willing to help them. That’s just the kind of guy I am.
What are they spending $1.5 billion dollars on? Does a server room and some staff cost $1.5 billion a year to maintain?
Probably the easiest thing in the world is to spend money.