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Reverse Engineering Facebook’s Business Model with Ballpark Figures

Blog: Business Model Alchimist

Originally I was planning to write a post on “Why The Crazy Facebook ($50B) and Twitter ($3B) Valuations Might Just Make Sense” by highlighting the key characteristics of their business model (e.g. scalability). However, I thought it would be way more fun to reverse engineer Facebook’s business model with ballpark figures in collaboration with you, my smart and loyal blog readers.

I sketched out the kernel of their business model and researched/guesstimated some numbers, since it’s always easier to start from something rather than from a blank sheet (or Canvas).

The above Business Model Canvas was sketched out with the Alpha version (V.0.7.0) of our upcoming iPad App. The numbers were researched on the Net and are still far from complete. Hence, your help and insights would be much appreciated.

Some numbers, like the fact that there is a ratio of about 250’000 users per Facebook employee, are pretty easy to find and calculate. Others, e.g. like the ad spending of Fortune 500 companies on Facebook (if anything like that exists) is much more difficult to research. Also, I rely on your knowledge for numbers such as the estimated IT cost of the Facebook platform.

Add your thoughts in the comment section! Below are the numbers I gathered today in my little temporary office in a fairy tale chalet in the Swiss Alps.





Revenue Streams


Don’t hesitate to point out any other big things that are missing! This is just a first sketch of a reverse engineered business model!

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