Facebook seems to be just as focused on its business as it is on its IPO. While it’s still trying to figure out the social advertising puzzle and crack the mobile advertising market, it continues to find innovative ways to generate revenue on its platform. It is apparently testing a “Pay to Highlight” feature which lets users pay a few dollars to have their posts appear to more of their friends. Currently, only 12% of any user’s friends see any specific status update on average. Facebook ensures that the desired status update reaches all of the user’s friends. 
Highlighted status updates could be a potential mini-goldmine
- Facebook Posts Stellar Q2 Results On Rising Mobile Ad Engagement Across Geographies
- What To Expect From Facebook’s Q2 Earnings
- Here’s Why Facebook Is Testing Offline Video Access In India?
- Facebook’s Latest Innovation To Make News Feed More “Personal”
- How Instagram Could Become A $9 Billion A Year Business for Facebook
- Facebook’s Class C Shares Explained
Highlighted status updates will get prominent placement like sponsored stories, but will be displayed only to the user’s friend circle. Facebook could potentially generate a significant amount of revenue from this feature, given how narcissistic many kids can be on Facebook and are willing to spend on virtual items like Farmville, and so we believe this feature could be a hit in that lucrative demographic. It could also be used by users to highlight important status updates in emergencies.
However, Facebook also risks disappointing users by cluttering their news feeds with paid updates and driving them into the arms of an eager Google+, whose own attempt at social networking resembles a ghost town of low engagement levels and activity.
Facebook is the largest social network in the world with more than 900 million monthly active users. It competes primarily with much smaller competitors like Google+, Twitter, LinkedIn (NYSE:LNKD) and Pinterest in the social networking space, and with Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT) and Yahoo (NASDAQ:YHOO) for online advertising dollars.
We currently have a $82 billion valuation for Facebook. Social text and display ads account for nearly 75% of its overall value.Notes: