Workplace exceeds 2.0 million paying users
Workplace, the Facebook (FB) subsidiary that specializes in connecting people at work, recently announced a growth milestone. In less than two years since its launch, Workplace says it has surpassed 2.0 million paying users every month.
Workplace’s charges start at $3 per month. With 2.0 million paying users, Workplace is able to generate at least $6.0 million per month in revenue, working out to roughly $18 million in quarterly revenue. Facebook currently doesn’t report Workplace’s revenue separately, but income from the business is reported under the company’s non-advertising businesses.
Revenue from Facebook’s non-advertising businesses rose 42% YoY (year-over-year) to $274 million in the fourth quarter. Non-advertising revenue rose 31.4% at Alphabet (GOOGL), 35% at Twitter (TWTR), and 104% at Baidu (BIDU) in the quarter. Of these companies, Facebook is the most reliant on advertising dollars, which contributed 98% of its total revenue in the fourth quarter.
Workplace is part of Facebook’s business diversification efforts
As Facebook currently derives the vast majority of its revenue from advertising, it looks to businesses such as Workplace to diversify its revenue sources. With e-commerce companies such as Amazon (AMZN) expanding in the digital advertising market, the pressure is mounting for ad-funded companies such as Facebook and Google to find new revenue streams outside of advertising to secure their futures.
Amazon captured 4.2% of the digital advertising market in the United States in 2018, according to eMarketer estimates, making it the third-largest digital advertising provider in the country behind Facebook and Google.