For all the growth in 2010 Facebook's ARPU is still less than one Text Message per month

AdAge has just published an analysis of Facebook’s advertising revenues for 2010 breaking down where the money comes from and where the growth is (See Facebook Books $1.86B in Advertising; Muscles In on Google Turf). For example Facebook has almost doubled its share of the US Advertising market to 4.7%. 65% of the revenue is generated in the US. While  about 40% of the revenues comes from the Brands and 60% from SMB.

To put the some perspective on Facebook’s position as an advertising revenue engine it should be understood that advertisers spent in excess of $2.6 Billion on TV advertising during the 2008-2009 NFL season.

What is missing out of the analysis is this very simple comparison between the 2009 and 2010 revenues.

• 2010 $1.86 Billion by 650 MIllion = $2.86 or $0.238 per Month in ARPU
• 2009 $0.74 Billion by 325 MIllion = $2.77 or $0.231 per Month in ARPU

This indicates that Facebook’s revenue engine hasn’t mature beyond the “breakeven” stage that Fred Wilson described in mid-2009 when he estimated Facebook’s monthly ARPU to be about $0.25 (See What’s on the MobCon Radar for the Social Networks?).

All of which suggests Facebook is still struggling to discover new ways of monetizing all that traffic.

This suggests that the only way Facebook can meet the growth projections that are being published by analysts for 2011 (e.g. GigaOM and eMarketer) is for it to grow its user base beyond 1.5 Billion. That’s about 76% of all internet subscribers.

Further Reading:

• Social Network Ad Outlook Is Modest And Unclear – Paidcontent

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