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investing in social media companies

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How Does Facebook Make Money? - October 2014

By , Associate Editor, Money Morning • @TaraKateClarke -

dividend-paying stocks

So far in 2014, we've seen Facebook stock (Nasdaq: FB) continue its dramatic share price rebound, up more than 40% this year alone. But have you ever wondered, "How does Facebook make money?"

Here’s what’s behind Facebook’s “Cinderella story” – and why a change it announced last week is going to make this social media company “an absolute juggernaut”…

How Do Social Media Companies Make Money?

By , Associate Editor, Money Morning • @TaraKateClarke -

Social media stocks are off to a good start in 2015, with Facebook Inc. (Nasdaq: FB) still leading the group.

Facebook's stock is up 14% over the past year to around $80 a share, and FB now has nearly the same market cap as Wal-Mart (NYSE: WMT). Facebook has 1.31 billion active users. And it released a "revolutionary" marketing platform that will challenge the likes of Google Inc. (Nasdaq: GOOG, GOOGL).

But a question that must be clear to investors is exactly how do social media companies make money?

To learn how to gauge which companies will succeed, we first need to understand how social media advertising actually works...