How Does Facebook Make it’s money?

With over 1 Billion per quarter in advertising revenue, and 1.3 Billion active monthly users, it’s no wonder that Facebook is a powerhouse in the business world. They’re more than a Social Networking site, they’re a business to look up to.
Facebook
Source: Business-Management-Degree.net

What They’re Paying For

While Facebook invites advertisers of all sizes, they’re all after the same thing: likes and shares.
The cost of Facebook ads varies but generally ranges from 5 cents to 5 dollars per click. Cost goes up based on targeting, bids and engagement.
Sidebar ads
The most common ads, these appear on the side of the site. Cost is about $1-$5 with most types of targeting.
Sponsored stories
Status updates from businesses turned into ads. Usually cost around 50 cents per click, since they get higher engagement (more likes and comments).
Promoted posts
Posts that are targeted to fans and friends of fans. Typically cost about $5 per every 1,000 people targeted.
A $1,000 budget for Facebook ads might look something like this:
Sidebar ads: 700 clicks to website – $700 ($1 per click)
Sponsored stories: 400 clicks to Facebook page – $200 ($.50 per click)
Promoted posts: 20,000 views – $100 ($5 per 1,000 views)

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