Mistake # 97: Lack a profit picture

Facebook announced several months ago that it is cash-flow positive and generating dollars from advertising revenue and exceeding the cost of servers and other expenses, Facebook could just be ready for IPO.

But what is its business model? How does it plan to grow profits in years to come? It grows users, but does it grow revenue? Could Facebook possibly adopt a similar model from Google? (Google’s business model of relying on Internet advertising for its sales, but uses math models and/or algorithms on the placement of the ads based on searches of products and services. Since Facebook is not a shopper’s destination, but a communication destination, what is the business model for profitability?

What’s yours?!


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