Canada Markets closed

How Facebook Will Reach $12 Billion In Revenue, Broken Down By Product

Jim Edwards

Join Facebook, LinkedIn, Trip Advisor and Disney at IGNITION West in March 2013 in San Francisco! Get market insight on mobile games, apps, devices, content and commerce. Register now.

In a note to investors, Topeka Capital Markets analyst Victor Anthony predicts Facebook's annual revenue will reach $12 billion in 2016. He thinks Facebook will book about $5 billion in sales this year, and add  about $1.5 billion each year after than in revenues.

Anthony's refreshingly thorough note breaks Facebook's revenue down by ad product, of which there are at least 12:

Display ads: More than 80 percent of Facebook's sales, currently.

Payments: Mostly from games. Anthony believes Facebook is making "a big push" to develop non-Zynga games on Facebook.

Sponsored Stories: The first social ad unit on Facebook.

Sponsored Search Results: FB is using this ad unit "as a testing ground for launching a search engine."

Facebook Exchange: Will take "a meaningful portion" of the $2 billion real-time bidding market.

Offers: "This ad unit is extremely viral because when a user claims an offer it is broadcasted to their friends."

Gifts: "In 2014, we estimate that FB could generate approximately $800mm in incremental revenues" from the new gifting service.

Promoted Posts: Will benefit from Facebook's restricted distribution of posts from brand pages.

Mobile App Installs Ads: FB gets "between $0.50-$3.00 each time a user clicks (not downloads) an app.

Custom Audience Ads: No charge per se, but better targeting.

Suggested Posts: A social ad unit that's still in testing.

Logout Page Ads: Ford, Microsoft, Samsung, Netflix, P&G, Subway and others have bought these ads, which can cost $700K. "FB once told Clickz that 37M people log-out each day, mostly from public computers," Anthony says.

Disclosure: The author owns Facebook stock.

More From Business Insider