Facebook App Financials

Ariel PolerApril 3, 2008

Revenue Scenarios

Large Lightweight Small Very Engaging Medium Very Engaging Medium Targeted cpm $ 0.50 $ 1.00 $ 1.00 $ 5.00 daily actives 750,000 25,000 100,000 100,000 pages per visit 3 25 25 10 pageviews 2,250,000 625,000 2,500,000 1,000,000 daily revenue $ 1,125 $ 625 $ 2,500 $ 5,000 annual revenue $ 400,500 $ 222,500 $ 890,000 $ 1,780,000

Increasing Revenue

• Large enough audience– Hundreds of thousands to millions

• Large enough inventory• Targeted & attractive audience• Dedicated sales team?– Hard to find & expensive…

Costs?

– Hosting scales with traffic. There could be some initial set-up costs, depending on approach

– Hiring? Estimate $10/pax/year.– Legal? A few thousand dollars up front. Should

remain minimal– You can keep costs very minimal until you get

traction. But your app must be intrinsically viral.

Planning for the end game

• Side Project? 1-2 people generating $10K to $100K per year.

• Lifestyle? 1-2 people generating $100K to $500K per year.

• Moderate exit? 3-10 people generating $500K+ per year and/or building a valuable and desirable asset.

• Big exit? Must ramp to tens of millions in sales per year and/or build something truly unique and valuable.

Financing Options

• Bootstrapped. Always a good approach…• Friends & Family. Those who believe in you…• Angel Investors & VCs.– Have traction and need growth capital & advice– Have a track record– Have a killer idea and plan to execute on it