2.
THE REVENUE PLAN
L
IBRA IS A revenue-
generating oppor-
tunity for Facebook,
though not in the ways
observers might expect.
Given that virtually all
of its revenue comes from
advertising, it’s tempting
to see Libra as a conduit
through which Facebook
could sell ads against
people’s financial data.
Joseph Lubin, a cofounder
of the cryptocurrency
Ethereum and a Facebook
critic, says, “It’d be a big
surprise if they didn’t
find a way to link [Libra]
information to everything
they already know” about
their users. But Facebook
has been adamant that
the systems underpinning
its digital wallet, Calibra,
will be firewalled off fromthe company’s broader
data-hoovering operation.
A Libra user’s purchase
history, in other words,
would not feed Facebook’s
marketing engine, at least
by default. (If you grant
permission, however, your
data is as good as theirs.)
Facebook also doesn’t
envision making money
from fees. In a digital-
currency context, the costs
exacted by payment provid-
ers will effectively drop to
zero, Marcus says—like theprice of email or texting.
So how does Facebook
plan to convert Libra
into moolah? For start-
ers, members of the Libra
Association plan to collect
interest on its reserves, in
the form of a dividend. If
the reserve pot grew big
enough, that could spin off
big bucks over time.
Another way Facebook
could profit would be by
making its marketplaces
even more valuable to its
advertisers. In theory, ina Libra world, paying for
things through Facebook’s
apps will become seam-
less. That dress you liked
on Instagram? Click “buy
with Libra,” and avoid the
dreaded “enter your credit
card information” page.
Fewer abandoned trans-
actions means boosted
“conversion” rates, or the
frequency with which ads
directly generate sales, says
Avivah Litan, a Gartner
analyst. And that, in turn,
should persuade market-
ers to spend more bidding
on ads.
By offering easy money
transmission through
Facebook apps, Libra could
also entwine itself and
Facebook in the lives of
people all over the world.
Want to transact abroad
without worrying about
steep fees? Use Libra.
Want to accept instantEveryone is talking about
digital currencies around the
world —everyone. If it hadn’t
come from us, that would
have taken much longer.”E-VANGELIS T
David Marcus,
who runs
Facebook’s
Libra division,
says the project
will eventually
benefit from its
high-profile
ALEX W stumbles.