The obvious answer is advertising. However, you can now purchase "gifts" to send to your friends. This month's featured gift is Aviator Sunglasses, "limited edition," at 1,000,000 units for a price of $1. Thats a lot of one dollars! I guess that's how they generate at least a portion of their income.
Facebook still makes most of its money from advertising...
Facebook, like many other community based web sites, generates the majority of it's revenue through what is called "pool investing." In Layman's Terms, pool investing consist of a number of investors pouring their money into a particular investment such as Facebook. Simply put, the more investors the more money, the more money, the more revenue.
.....in regard to the above paragraph about "pool investing" and the notion that "Simply put, the more investors the more money, the more money, the more revenue" -- there's a term for that: PONZI SCHEME!
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