But are social networks unprofitable? My humble income calculation

    I do not pretend to be any truth, I just want to share my thoughts.

    Very often I hear that all social networks are unprofitable and do not bring any income to their owners. In the best case, the owners go to zero, and at worst at a loss. I mean networks like VKontakte and classmates. And I hear this very often recently, although for a long time, these social services. Networks have various kinds of monetization ranging from advertising to various paid services.

    Such statements are absolutely incomprehensible to me - firstly, if this is so and the network does not bring owners income, then what's the point of maintaining such a network? If you hope that it will start to generate income, then another question arises - when? Enough time has already passed to start generating this income. And if you hope to sell, so who needs a loss-making network that does not generate revenue with the current monetization scheme? But this is all a saying. Again my speculations and maybe they are not right.

    But worth reading ...

    In fact, I wanted to "get into" my pocket and try to calculate the profit / loss of the network. Take in VKontakte and try to calculate the revenue only from advertising. The site has some statistics. Unfortunately on liveinternet.ru - they covered up detailed statistics, but we can rely on the statements of Mr. Durov himself , Alexa’s rating on page views, so at least we’ll calculate some minimum. So we have ~ 1,000,000,000 page views per day (very roughly rounded down, in fact, judging by Alex and the statement of the contact head, there are much more of them). From this page you can see that the advertisement is placed through the company Media Plus. Rates here. This means that approximately 30% of the revenue goes to this company. For 1000 impressions, they ask for 48 rubles. it's about 1.3 USD. Also, according to the most conservative estimates, suppose that advertising is shown only in 70% of the total page impressions (there is not always advertising, someone has banner cutters, etc.). We also take into account the average discount of 20% for advertising. And the average mark-up for targeting is also 20% (usually they don’t eliminate themselves). It seems that all the data has been collected - you can calculate:

    1,000,000,000 / 1,000 * 1.3 USD = 1,300,000 USD / day. (in an ideal scenario it would be so ... sour)

    Now we add and subtract all our percentages:

    70% of 1,000,000,000 is 700,000,000 impressions.

    Recalculate the total amount:

    700,000,000 / 1000 * 1.3 = 910,000 USD / day. (you can still live :))

    910,000 - 30% = 637,000 USD / day. - minus the agency

    637,000 + 20% = 764,400 USD / day. - average targeting margin of 764,400

    - 20% = 611,520 USD / day. - the average discount for the volume of impressions. In

    total, we have a good amount of 611,520 USD / day, and this is only with one! banner. Suppose that the second banner is shown only in 50% of cases (they show it when they scrolled the page to the end), add to this amount 50% and ...

    611 520 + 50% = 917 280 USD / day.

    This is 917,280 * 30 = 27,518,400 USD / month.

    They say that there are high costs for the server. Let's count them.

    UPD:For example, the entire project occupies 2000 servers (based on the achievements of some experts). Let's take not the “cheapest” ones at 5,000 USD per server (these are good enough servers!)
    I used to count 10,000 per server, but they convinced me ...

    5,000 * 2,000 = 10,000,000 USD was spent one-time.
    I think about hosting costing about 40-50 USD a month (with all sorts of discounts, etc.), but for skeptics, we take 150 USD / month.

    2000 * 150 = 300,000 USD / month.

    Salary to staff. Honestly - HZ. Once I read that they have about a dozen people working. Well, take two dozen on average at 3,000 USD / month. Per person:

    3,000 * 20 = 60,000 USD / month.

    Taxes: VKontakte is 100% offshore ... let it take 5% on taxes, to be honest, I don’t even want to take it :)

    Total we have, according to conservative estimates, monthly income: 27,518,400 USD

    Expenses: 60,000 + 300,000 = 360,000 USD

    Add here the installation of new servers every month ... Well, for example, another 10 servers is 50,000 USD for hardware. Yes, even if 100 servers out of 27 million can be allocated to new servers ...

    In general, this is my arithmetic.

    Once again, this is just my guess. I have nothing to do with the above networks and to any structures :)

    Who has any thoughts on this matter - please comment.

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