While plenty will tell you that Facebook is greatly overvalued, at this point second market transactions value it at about $80 billion, there are some signs that the social network is becoming a big player in the ad market and that it's finally starting to generate meaningful revenue from this.
In fact, the latest eMarketer report shows that Facebook is now the biggest display ad player in the US, or rather, it will be in 2011, greatly outperforming both Yahoo and Google.
Yahoo has traditionally owned the display ad market in the US, but Google has been growing fast lately. Some recent reports indicate that Google has overtaken Yahoo
to be the biggest player in the US.
The new report paints a different picture though. It estimates that Facebook will end up making $2.19 billion in ad revenue in the US in 2011. All of Facebook's ads are labeled as display ads.
This while both Google and Yahoo get lowered estimates, Google is expected to make $1.15 billion in the US this year, a 10 percent drop from a previous report, and Yahoo will rake in $1.62 billion, 2 percent lower than previous estimates.
What's even more interesting, some analysts and reports indicate that Facebook's surge in display ad revenue don't come at the expense of competitors, the entire market is growing.
In fact, the new revenue doesn't even come from other web advertising budgets, it's mostly drawing from budgets previously reserved to traditional venues, like TV.
Of course, it's hard to know just how well Facebook is doing until it files for an IPO and starts releasing revenue numbers, but the site does have close to 700 million users world wide and 150 million in the US alone, though some recent reports indicate that growth has leveled off in the US. [via AdAge