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September 20, 2011

Facebook advert revenues to reach $3.8bn this year: eMarketer

Global ad revenues include $2.01bn from US, says market research firm

By CBR Staff Writer

Global advertising revenues for social networking site Facebook is poised to double this year, reaching $3.8bn, estimates eMarketer.

The market research firm said that as Facebook doubles its advertising intake, Mark Zuckerberg’s company is also diversifying its revenue streams and adding dollars through other means, like Credits.

The figures released by eMarketer is a downward revision of an earlier estimate for Facebook. In January, eMarketer forecast advertising revenues would reach $4.05bn in 2011.

However, eMarketer said that the revision does not mean that Facebook is losing its buzz.

"This slight revision downward for 2011 should not be taken as a sign that Facebook’s overall business is losing momentum," said eMarketer principal analyst Debra Aho Williamson.

"Facebook’s revenue streams will continue to diversify, with ads representing a decreasing proportion of total revenue while other sources, such as Facebook Credits, will grow," added Williamson.

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The market research firm said that total revenues at Facebook, which include those from advertising as well as Facebook Credits and other sources, is expected to reach $4.27bn this year. That’s more than twice as high as the $2bn Facebook is estimated to have earned in 2010, eMarketer said. Ad revenues will make up 89% of the total this year, down from 95% in 2009, it added.

The social networking site will garner most of its advertising revenue within the US. eMarketer said Facebook ad revenues will surpass $2bn this year, accounting for just over half the worldwide total. US ad revenues will continue to rise at a rapid clip, but overseas ad dollars will represent 50% of the pie next year and a slight majority by 2013, said eMarketer.

The market research firm warned that Facebook will continue to have to prove to advertisers that its products deliver results.

"Even though Facebook has spent several years wooing marketers, many of them still believe the ads aren’t effective at driving clicks and other actions," said Williamson. "Facebook must either work to improve its clickthrough rate or show advertisers that advertising on the site is effective even without a click or other action."

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