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Many people seem a bit confused about how Google and Facebook operate even as they give their products for free to use. Facebook or Google dose not charge you anything for using their services, so how do they make so much money, and why are they worth billions of dollars?



 If you are not paying for the product, then chances are that you are the product.
This saying could be used in the case of Facebook And Google as both of this companies has based their business model around targeting their users with relevant ads,  Both of these companies let you use their products for free and in return you personal data and tries to monetize it, this might not sound a great idea at first but when applied properly, big companies could make a tonne of revenue through this method.

Facebook.

Facebook is currently the market leader in user base, as of Q4 2017 it has more the 2.06 billion monthly active users, with user base this big Facebook has a huge chunk of data to work with.


  Many big and small companies take advantage of the enormous user base to show ads and sell their product's to users on Facebook, they use the data collected form Facebook to target specific people to show their products to, Facebook tracks what the user is searching, where they visit, what they click on, how much time they spend on a page, and using all that data Facebook's algorithm tries to figure out what they like, what they don't like, what's their subject of interest and according to that information specific ads are shown to the users.

   This is a very effective type of marketing, as user only see's the ads about the subject they like, which increases the chances of one to click on the ads. Facebook also provide paid options to promote one's profile or Facebook page to a wider audience.

Google.

  Google also works on somewhat the similar principle of  Facebook, Google being the most used  website in the world has a huge user base and it also uses data mining and various algorithm to interpret to user's data  and show them suitable ads and offers.


    
  Google dose have a slight edge over Facebook in terms of number of users and also Google has been doing this since a much long time as compared to Facebook, google also owns YouTube, which is also used by google to obtain user data and as an advertising platform, Google also made the Google maps, Google drive, Google photos , android operating system (which is currently the most used mobile operating system in the world) and many other services which help increase Google's reach by many folds,a few years ago Facebook acquired Instagram and Watsapp to increase its reach, they use user data from all 3 of the platform and also buy data from other companies to further flourish their advertisement business.    

Conclusion. 

  In this day & age social media marketing, data mining and targeted ads are widely used by business and by regular user's to promote themselves, this is basically how Google, Facebook and many other companies work.  

 Comment below what are your thoughts about this business model, are you willing to sacrifice your privacy to use these products for free....?


6 comments:

  1. A very nice and informative blog...Way to go...

    ReplyDelete
  2. Gave a good insight to the business side of the "free" sites that we all use everyday...

    ReplyDelete
  3. Gives a good view to a common user as to how their data is used by these sites...Its important to be aware before sharing your info on these sites since the same is used commercially by these site and with ur consent (we would have agreed to their terms already!).While in todays world these sites and services are part of life and not completely avoidable, we should be alert enough to share minimum personal information while we continue using their services...

    ReplyDelete
    Replies
    1. Yes, and almost all the people ignore what's written in the Terms & conditions, which could result in misuse of their private information.

      Delete

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