How Facebook Made So Much Money Despite Its Reputation

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Come slightly nearer to your display. That’s it. I wish to let you know a secret: Facebook is the perfect cash machine on the web, and it’s not a detailed name.*

Facebook could also be an indefensible firm that normalizes invasive monitoring of individuals for . It’s a spot the place extremists have ricocheted hate all over the world. It could also be melting our brains. And it’s being sued or prodded by so many governments that I’ve misplaced depend. You would possibly hate it. I would hate it? But I nearly can’t imagine how many people depend on Facebook, and the way stupidly profitable it’s.

The firm mentioned on Wednesday that its gross sales — almost all of which come from the adverts it sells on Facebook, on Instagram and its different apps — reached almost $86 billion in 2020 and are rising quickly, as my colleague Mike Isaac detailed right here. Each day, 2.6 billion individuals use a minimum of one in all Facebook’s apps, and the person numbers are nonetheless rising.

This is an organization that’s embroiled in a distinct scandal every week and that individuals say they dislike, but its merchandise are utilized by billions of individuals, and companies spent like loopy on adverts throughout a pandemic to succeed in them.

And the actually wild factor is that Facebook’s merchandise value the corporate nearly nothing to make. The Instagram selfie of you being vaccinated, the submit from Mom a few fund-raiser, and your Facebook parenting group — these are the corporate’s merchandise, and most of us are making them without cost. It implies that Facebook could be very worthwhile.

I’ve been writing about company funds for a very long time. I don’t suppose I’ve ever seen this mix of recognition, fast-growing gross sales, fats earnings — and full revulsion. “The gap between Facebook’s public reputation and its financial success has never been greater,” Kurt Wagner of Bloomberg wrote this week.

Historians, tell me if there’s a comparable company that was so reviled and yet so widely used and successful. (If you say the Gilded Age trusts like Standard Oil, I’d argue they make the point for Facebook’s critics who want the company broken up like the trusts of a century ago.)

Near the beginning of the coronavirus outbreak, my colleagues wrote that strong companies like America’s technology superpowers would most likely become even stronger in this crisis. But as corporations’ 2020 financial returns roll in, it’s clear that we underestimated just how much the rich would get richer.

Apple, Netflix, Microsoft and other tech powers are making products that people and businesses are relying on to make it through a pandemic. And they are raking in money hand over fist.

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