How did Facebook reach its first $100 million mark in revenue?


905755_10156166504415411_9161364432752367530_o

How do you make a mark with a new company in a competitive market?

The answer may surprise you – and change the way you think about your own business strategy.

In 2006, Mark Zuckerberg and his team were more focused on coding Facebook than growing revenue. Mark hired Dan Rose from Jeff Bezo’s amazon.com as “VP of Business Development” to help grow revenue.

Dan had learned from Jeff Bezos that one big partnership can make all the difference to revenues. He watched Myspace start doing big deals in the grand style of it’s new Deal Maker owner, Rupert Murdoch. The problem was, Facebook was growing, but was not as big or as established as Myspace yet, so its marketing partnerships were still small.

Within a month of Dan joining Facebook, in August 2006, everything changed. Myspace announced a $900 million deal with Google. Myspace had the traffic, and Google had the ad network. It was a perfect partnership where Google would manage Myspace’s ads, and that deal single-handedly made Myspace profitable.

Dan Rose asked “Who has the most to lose from this deal?” The answer was Bill Gates’ Microsoft MSN ad network, which had lost out to their arch rival Google. Dan jumped on the phone to Microsoft, and asked them if they wanted a similar deal with Facebook. Microsoft’s answer? “Okay, we’ll be down there tomorrow to iron it out.”

That one deal, wrapped up 24 hours later, doubled Facebook’s revenues in 2006 from a forecast $22 million to over $40 million. The year after, the Microsoft deal was worth over $100 million in revenue to Facebook.

One phone call to solve Microsoft’s problem – which was not wanting to lose to Google – led to Facebook’s first $100 million.

Sometimes to win the war, it’s easier to help others fight their battles than to fight your own. Sometimes their battles are much bigger than yours.

Who would you love to work with who would want to have you in their corner? Who could you be helping to win big today?

The fastest way to find out? Bring in someone with inside knowledge – Inside knowledge that’s outside the box.

“If opportunity doesn’t knock, build a door.”
~ Milton Berle

Leave a comment