Facebook Doesn’t Make as Much Money as It Could—On Purpose
reposted from http://www.wired.com/2015/09/facebook-doesnt-make-much-money-couldon-purpose/

YOU CAN THINK of John Hegeman as Facebook’s chief economist. He spends his days thinking about the economics of Facebook advertising.

That’s an enormous thing. Facebook pulled in $4.04 billion in the second quarter of this year. And the overall economy of Facebook advertising, as Hegeman describes it, is far larger. Advertising, you see, is very much a part of everything else on the world’s largest social network. Hegeman doesn’t just think about ads. He thinks about how ads fit with the rest of Facebook.

When he joined Facebook in 2007, after getting a master’s in economics at Stanford University, Hegeman helped build the online auction that drives the company’s advertising system. Auctions are the standard way that online services accept ads from advertisers and place them on web pages and inside smartphone apps. That’s what Google uses with AdWords, the system that serves up all those ads when you look for st ...

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