How Facebook Earned $1.86 Billion Ad Revenue in 2010

Facebook raked in $1.86 billion in ad revenue in 2010, and most of that dough didn't come from the big name advertisers.

According to an AdAge report that cited revenue estimates from eMarketer, 60 percent ($1.12 billion) of Facebook's earnings came from smaller companies. These are companies that are likely to produce ads themselves as opposed to using an ad agency. AdAge said that a year ago, companies of this size accounted for closer to 50 percent of Facebook's ad sales.

"Those advertisers are really juicing Facebook's growth," Debra Williamson, an eMarketer principal analyst, told AdAge. "They buy advertising in bulk. They've done it for years on Google, and now they're taking that expertise to Facebook."

By contrast, Facebook earned $740 million from big-name companies such as Coca-Cola, Proctor & Gamble, and Match.com in 2010. In fact, AT&T and Match.com are still the two biggest advertisers on the site.

Google is actually the fifth-ranked advertiser on Facebook. It's a bit ironic considering there has been some bad blood between the two over the past year, starting when Google blocked users from importing Facebook friends via Gmail. Facebook then turned around and removed all mention of Google contact import from the "Find your Friends" feature. It was also suggested that Facebook's revamped messaging system that debuted in November would be a Gmail killer, but Facebook CEO Mark Zuckerberg refuted that claim.

Regardless of their differences, the trend toward smaller companies advertising on Facebook shows similarities between both Facebook and Google, AdAge said.

Facebook's increased revenue hasn't affected Google's market share much; AdAge said the Internet giant brings in more than $2 billion in ad revenue every month. However, Facebook is extending its reach. It currently makes up five percent of ad spending on the Web and AdAge said that rate could grow to eight percent this year.

eMarketer's estimate for Facebook's 2010 ad revenue is evidence of the social-networking site's growth. The firm predicted that Facebook took in $740 million in global ad sales in 2009. 2010's numbers show an 86 percent year-to-year increase.

View the original article here