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2) from both regulators and an important app economy gatekeeper, Apple Inc. It also faces headwinds (a word used more than 30 times during Facebook's most recent earnings call on Feb. Facebook, which pushed the idea of precisely targeted advertising so hard that it was likely oversold, ended up losing users and taking a gigantic market valuation hit. Content production is expensive  staying out keeps down fixed costs, while monetizing other people's content through advertising has turned out to be extremely lucrative.īoth relatively “pure” models have run into trouble lately, though. They don't produce the content, but provide platforms for it and ways of locating it. Yet, unlike Amazon and Microsoft, both Google and Facebook, with 81% and 97% of revenue, respectively, coming from advertising, are at their core content companies, or, narrower still, media companies.

(Google and Facebook) are finding it hard to remain primarily ad-funded, and that diversification makes other tech giants, such as Microsoft Corp. My Bloomberg Opinion colleague Parmy Olson pointed out recently that Alphabet Inc. Now it's the new, tech-based media's turn to give it a try. Traditional (or legacy, if you will) media failed to achieve an equilibrium between the two revenue sources and suffered terribly for it during the technology revolution of the 2000s. The two developing tech dramas of early 2022 - the struggle of Meta Platform Inc.'s Facebook to retain users as surveillance-based advertising becomes more difficult and Spotify Technology SA's Joe Rogan controversy - are really about one thing: Finding the right balance between ad-based and subscription-based monetization models on the internet.