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Economic impact[edit]

Facebook, Inc. has utilized growing internet markets using a social media platform to expand it's user base while generating billions of dollars in revenue from Facebook's companies. Through empirical findings, economists have been able to identify key areas where Facebook has been able to stimulate economic activity by offering a free public good in that one user will not reduce the amount available to another, while also generating positive externalities. Thus, mobile phone manufactures and carriers have been beneficiaries to Facebook's spillover effect. Three distinct areas have been found to add the most economic impact, the first is platform competition, the marketing place, and finally, user behavior data.^[1]

Facebook's platform is efficient because it lowers barriers to entry and lowers costs for businesses to rapidly innovate new ideas. Scalability is accomplished with less wasted resources and monetized by collecting user behavior and usage data for targeted advertising. Facebook advertising allows firms to reasonably scale up operations to reach Facebook users. Facebook's daily active users have increased 18% year-over-year^[2] and burgeoning from 1 million users in 2004, to over 1.9 billion in 2017. Facebook is a leader among tech companies who continues to improve their carbon impact through more efficient data centers and clean renewable energy.^[3]

By the end of 2016 Facebook's total revenue earnings were 27.638 billion, gross profit of 23.849 billion and a net income of 10.188 billion for year end 2016.^[4]

Facebook provides a development platform for many social gaming, communication, feedback, review, and other online activities related applications. This open platform of Facebook has spawned many new businesses and added thousands of jobs to the economy. Zynga Inc., a leading company in social gaming app development, is an example of those businesses. An econometric analysis performed by Hann et. al.^[5] studied the impact of Facebook on the economy in terms of the number of jobs created in the economy and the economic value of those jobs. The conservative estimates of this study shows that the app development platform of Facebook added more than 182,000 jobs in the U.S. economy in 2011. The total economic value of the added employment was about $12 billion.

Facebook companies[edit]

^ Levin, J. (2013). The Economics of Internet Markets. In D. Acemoglu, M. Arellano, & E. Dekel (Eds.), Advances in Economics and Econometrics: Tenth World Congress (Econometric Society Monographs, pp. 48-75). Cambridge: Cambridge University Press. doi:10.1017/CBO9781139060011.003
^ "SEC Quarterly Report". Facebook, Inc. March 31, 2017. Retrieved June 15, 2017.
^ "Sustainability; Our Footprint". FB. Retrieved June 15, 2017.
^ "(FB) Income Statement". Yahoo Finance. December 31, 2016. Retrieved June 15, 2017.
^ The Facebook App Economy (2011). University of Maryland, https://www.rhsmith.umd.edu/files/Documents/Centers/DIGITS/AppEconomyImpact091911.pdf
^ "Facebook Companies". Facebook. Retrieved June 15, 2017.

[1] Levin, J. (2013). The Economics of Internet Markets. In D. Acemoglu, M. Arellano, & E. Dekel (Eds.), Advances in Economics and Econometrics: Tenth World Congress (Econometric Society Monographs, pp. 48-75). Cambridge: Cambridge University Press. doi:10.1017/CBO9781139060011.003

[2] "SEC Quarterly Report". Facebook, Inc. March 31, 2017. Retrieved June 15, 2017.

[3] "Sustainability; Our Footprint". FB. Retrieved June 15, 2017.

[4] "(FB) Income Statement". Yahoo Finance. December 31, 2016. Retrieved June 15, 2017.

[5] The Facebook App Economy (2011). University of Maryland, https://www.rhsmith.umd.edu/files/Documents/Centers/DIGITS/AppEconomyImpact091911.pdf

[6] "Facebook Companies". Facebook. Retrieved June 15, 2017.

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