Facebook, a social media service now owned by Meta, was founded in 2004 by Mark Zuckerberg with fellow Harvard students and roommates Chris Hughes, Dustin Moskovitz, Andrew McCollum, and Eduardo Saverin. Since the company was founded some seventeen years ago, it has moved far beyond a simple social networking platform into related industries such as virtual reality, web analytics, artificial intelligence, and even solar-powered drones.
Subsidiary / Division
Business Category
Key Differentiator
Integration Strategy
Meta (formerly Facebook)
Social Media and Social Networking
Leading social media platform.
Serves as the core product, offering a platform for connecting people, sharing content, and social networking.
Instagram
Photo and Video Sharing
Popular photo and video-sharing platform.
Enhances Meta’s social media ecosystem, focusing on visual content and influencer-driven engagement.
WhatsApp
Messaging and Communication
Encrypted messaging app with global reach.
Expands Meta’s communication services, with a strong emphasis on privacy and secure messaging.
Messenger
Messaging and Communication
Instant messaging and chat app.
Provides additional messaging and communication options, enabling direct communication within the Meta ecosystem.
Oculus
Virtual Reality (VR)
VR hardware and experiences.
Ventures into virtual reality, offering immersive experiences and technology for gaming and entertainment.
Portal
Smart Devices and Video Calling
Smart display and video calling devices.
Focuses on hardware for video communication and integrates with Meta’s social and messaging services.
Facebook Reality Labs
Augmented Reality (AR)
AR research and development.
Advances AR technology and applications, aiming to integrate augmented reality into daily experiences.
Spark AR
Augmented Reality (AR) Platform
AR creation and development platform.
Provides tools and resources for creators to build augmented reality experiences on the Meta platform.
Meta Labs
Research and Development
Research on future technologies and projects.
Focuses on long-term technology advancements, including AI, connectivity, and next-gen internet solutions.
Novi Financial
Digital Wallet and Cryptocurrency
Digital wallet and cryptocurrency services.
Introduces digital payments and cryptocurrency solutions, integrating with Meta’s social and messaging platforms.
Meta for Business
Business Services and Advertising
Tools and services for businesses and advertisers.
Supports businesses in advertising and promoting their products and services on Meta’s platforms.
Meta AI
Artificial Intelligence (AI)
AI research and development.
Advances AI technologies and applications, enhancing user experiences and data analysis across Meta’s platforms.
Oculus is a producer of virtual and augmented reality hardware and software originally founded in 2012 by Palmer Luckey, Brendan Iribe, Michael Antonov, and Nate Mitchell.
The first product Oculus released was Oculus Rift, a virtual reality headset for video gaming.
Facebook acquired Oculus in 2014 for $2.3 billion in cash and stock – the company’s second-largest acquisition behind WhatsApp.
Since then, Oculus has spurned subsidiaries of its own such as 3D scene mapping company Surreal Vision and American video game developer Sanzaru Games.
Ready at Dawn
Ready at Dawn is a California-based video game developer composed of former employees of Blizzard Entertainment and Naughty Dog.
The developer is perhaps best known for the titles Daxter and God of War, and now operates a separate campus in Oregon to further its development ambitions.
Ready at Dawn is another Oculus subsidiary acquired in June 2020 to create virtual reality titles for the platform.
Giphy
Giphy is a database of short looping videos that social media users in visual communication.
The database, launched in 2013 by Jace Cooke and Alex Chung, started as a search engine for the more primitive GIF.
Various apps and acquisitions were made over the following years as Giphy increasingly integrated with social media.
However, the deal attracted scrutiny in the United Kingdom for anticompetitive behavior and because of Facebook’s recent privacy scandals.
In late 2021, antitrust regulators in the UK ordered the company to divest Giphy. This is a decision that Facebook has decided to appeal.
Kustomer
Kustomer is a CRM platform that Facebook acquired toward the end of 2020.
The omnichannel platform can show customer conversations from multiple channels in a single view and has become a useful tool for small businesses that advertise and sell on Facebook.
Kustomer is also used by larger clients such as Sweetgreen, Glossier, and Abercrombie & Fitch Co.
In addition to the CRM platform, Kustomer also offers chatbots that use artificial intelligence to interpret customer intent, enable self-service, and resolve queries more efficiently.
The move was seen as a response to Google’s purchase of a similar company as part of a race to connect remote locations worldwide to the internet.
As part of the deal, Ascenta and its specialist staff joined a team of scientists and engineers as part of Facebook’s Internet.org non-profit to beam the internet to the world from the sky.
Key takeaways:
Since Facebook was founded some seventeen years ago, it has moved far beyond a simple social networking platform into related industries such as virtual reality, web analytics, artificial intelligence, and even solar-powered drones.
Facebook subsidiaries include virtual reality software and hardware company Oculus, which now has several video game development subsidiaries of its own.
Solar-powered drone manufacturer Ascenta and CRM platform Kustomer are also Facebook subsidiaries. Facebook also acquired animated video platform Giphy in 2020, but the deal was considered anticompetitive and it remains to be seen as to whether the company will have to divest.
Facebook, rebranded as Meta in 2021, is primarily owned by Mark Zuckerberg, founder, and CEO. Zuckerberg keeps tight control over the ownership and decision-making of the company. Other large individual shareholders comprise former COO Sheryl Sandberg and co-founder Eduardo Saverin. Large institutional investors include BlackRock, Vanguard, and Fidelity.
Facebook, the main product of Meta is an attention merchant. As such, its algorithms condense the attention of over 2.91 billion monthly active users as of June 2021. Meta generated $117.9 billion in revenues, in 2021, of which $114.9 billion from advertising (97.4% of the total revenues) and over $2.2 billion from Reality Labs (the augmented and virtual reality products arm).
Facebook generated most of its revenue from advertising in 2023. Indeed, the company generated $131.95B from advertising, $1.89B billion from its reality labs segment, and over a billion in other revenue.
By September 2022, Facebook’s (Meta) employee count had peaked at 87,314. Yet, as revenue slew down for the first time in years, the company announced a layoff of 13% of its workforce, bringing the headcount to 75,964. By March 2023, Meta announced another round of layoffs, dubbed “The Year of Efficiency,” which brought the headcount down to less than 66 thousand employees. By the end of 2023, Facebook reported 67,317 employees.
In 2022, post layoffs, Facebook generated $1,535,056 per employee, compared to $1,638,586 in 2021. In 2023, as Facebook (now Meta) completed its mass layoffs, the company reported nearly $135 billion in revenue and 67,317 employees, with a $2,003,981 revenue per employee.
Facebook (Meta) gained users in 2023. In fact, in 2023, Facebook had over three billion users worldwide, of which 272 million were in Canada, 408 million were in Europe, over 1.3 billion were in Asia, and over a billion were in the rest of the world.
ARPU, or average revenue per user, is a crucial metric for attention merchants like Facebook. It assesses the ability of the platform to monetize its users. For instance, by the end of 2023, Meta’s ARPU worldwide was $13.12. In the US & Canada, it was $68.44; in Europe, it was $23.14; in Asia-Pacific, $5.52; and in the rest of the world, it was $4.50.
ARPU, or average revenue per user, is a crucial metric for attention merchants like Facebook. It assesses the ability of the platform to monetize its users. For instance, by the end of 2023, Meta’s ARPU worldwide was $13.12. In the US & Canada, it was $68.44; in Europe, it was $23.14; in Asia-Pacific, $5.52; and in the rest of the world, it was $4.50.
Facebook (Meta) revenue in 2023 increased to $134.9B, compared to $116.6B in 2022. Its profitability increased to $39.1B in 2023, compared to $23.2B in 2022 and $39.37B in 2021.
As of September 2022, Facebook, rebranded as Meta, is a profitable company, generating $18.54B in net profits. Yet, if we look at its Reality Labs segment, which is in charge of building the Metaverse, it recorded a net loss of $9.44 billion in the first nine months of 2022.
Instagram makes money via visual advertising. Acquired by Facebook for a billion-dollar in 2012, today, Instagram is integrated into the overall Facebook (now rebranded as Meta) business strategy. In 2018, Instagram founders Kevin Systrom and Mike Krieger left the company as Facebook pushed toward tighter integration of the two platforms. In 2022, Instagram is the most successful product still, in Meta’s portfolio.
Founded in 2009 by Brian Acton, Jan Koum WhatsApp is a messaging app acquired by Facebook in 2014 for $19B. In 2018 WhatsApp rolled out customers’ interaction services, starting to make money on slow responses from companies. And Facebook also announced conversations on WhatsApp prompted by Facebook Ads.
Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organizational structure is organized around the leadership of Mark Zuckerberg and the key executives around him. On the other hand, the function-based teams are based on the main corporate functions (like HR, productmanagement, investor relations, and so on).
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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