Profit model revealed! Zuckerberg: Libra will bring Facebook significant advertising revenue

Facebook held its annual shareholder conference call recently, during which founder Mark Zuckerberg once again mentioned the stalled stablecoin project Libra. Zuckerberg believes that the Libra payment system will help boost Facebook's advertising revenue by allowing businesses to advertise more efficiently, which in turn will benefit Facebook's overall finances.

The Complementary Relationship Between Payments and Advertising

During the recent annual shareholder conference call, Mark Zuckerberg was asked about the financial benefits of the stablecoin project Libra for Facebook and how it would help Facebook make money.

His response was:

Not just Libra, but we should also think about our advertising business. It has a very important feature, which is the "auction mechanism." The auction mechanism has many good qualities - we don't have to set prices, we let businesses bid on their own based on the results they want and the value the ads bring to them, so we can offer very low prices to businesses. It is a very efficient and inclusive way for them.

Zuckerberg believes that whether it's Facebook Shops or other businesses, through Libra and Facebook Pay, there is a greater opportunity for users who are viewing ads to make purchases because they already have a convenient payment method at their fingertips. This makes it more worthwhile for businesses to bid higher for ads.

Zuckerberg envisions the potential of integrating a convenient payment system with commercial advertising, which may be highly attractive to consumers and may be irresistible to their spending desires. However, he reiterated Libra's vision for financial inclusion, stating:

Payments are a long-standing core infrastructure that has not changed much over the years. Most of what we do is to provide services to people around the world. Cross-border payments are still troublesome, so I believe Libra has the opportunity to simplify the process of transactions and payments, which would be a good thing for people around the world and could even be beneficial to the overall economy.

Libra's Brand Reshaping in 2020

Despite facing strong resistance from authorities worldwide last year, Libra has been making continuous moves since the beginning of this year, indicating its determination to launch. In addition to releasing a new version of the whitepaper, they have also appointed Stuart Levey, who previously served as the first Under Secretary of the Treasury for Terrorism and Financial Intelligence during the Bush and Obama administrations, as CEO.

Interestingly, in 2018 and 2019, Zuckerberg faced proposals from multiple shareholders to limit his power, including appointing an independent board chair, reforming the dual-class stock system, and eliminating additional voting rights for board members. However, due to Zuckerberg's overwhelming voting power, these proposals were all rejected, and the power struggles that used to play out at past shareholder meetings are no longer seen.