As the social network steams past 650 million global users, its business is looking more like Google’s in that the majority of its ad sales now come from small- and medium-size companies that make use of its self-serve ad system, a model that turned Google into a $200 billion behemoth during the past decade.
According to an estimate from eMarketer, Facebook took in $1.86 billion in worldwide advertising revenue for 2010, an 86% increase over the company’s estimated 2009 advertising revenue of $740 million worldwide. Not surprisingly, the majority of that, $1.21 billion, was earned inside the U.S.
But what is surprising is the majority of revenue, 60% or $1.12 billion, was earned from smaller companies in 2010, those more likely to be using self-serve tools rather than work through a media agency. That’s greater than the $740 million coming from major marketers like Coke, P&G or Match.com.
“Those advertisers are really juicing Facebook’s growth,” said Debra Williamson, principal analyst at eMarketer. “They buy advertising in bulk. They’ve done it for years on Google, and now they’re taking that expertise to Facebook.”
The estimate adds weight to the leaked revenue figures that came out of the company’s recent funding round with Goldman Sachs, which could put as much as $2 billion into Facebook’s coffers without an IPO. Reuters reported that based on Goldman’s offering plan, the company had made $1.2 billion in the first nine months of the year, suggesting that an annual run-rate of $2 billion is a little high.