Facebook needs to make their investors happy, and the only way to do that is generating revenue through different avenues, such as advertising. As many users know, Facebook has already scoured its social network with sponsored this and sponsored that, as well as catered ads based on user data. Now, the company is looking to expand that outside of Facebook’s fortress.
One way that Facebook is looking to earn some revenue is through an external advertising network, which uses information about users and their activity on Facebook as a way of targeting ads on other websites. Venture-capitalist Chris Dixon says that “an external ad network is inevitable. Google proved this model with Adsense.”
While Dixon says that it’s almost impossible for other ad networks to compete with Adsense, “Facebook’s traffic is so great now that an external ad network might increase their revenues by 2x or so.” That would essentially boost Facebook’s yearly revenue to $10 billion. Of course, the only websites that you would find Facebook ads on would be those that the social network partners up with, so don’t expect every single website to be filled with Facebook ads, but it’s said that Facebook will start with Instagram to test out its external ad network, and will move onto other sites where they will attempt to partner up with them in order to serve catered ads.