Facebook generates $227 billion of ‘real economic activity’

Report, commissioned by Facebook, looks at businesses that maintain pages on Facebook

With 1.35 billion users of its Internet social network, Facebook would rank as the world's second-most populous nation if it were a country.

While its users may populate only a virtual country, Facebook says it generates a lot of real economic activity - $227 billion worth of economic impact and 4.5 million jobs in 2014, according to a new study by consulting firm Deloitte & Touche that Facebook commissioned.

The report looks at the businesses that maintain pages on Facebook as well as the mobile apps and games that consumers play on Facebook and measures all the economic activity that result.

It also considers the demand for gadgets and online connectivity services that are generated by Facebook. When a company advertises to customers on Facebook, for example, some of the resulting sales can be directly attributed to Facebook.


When consumers donated $100 million for research into amyotrophic lateral sclerosis during this summer's Ice Bucket challenge, Facebook's auto-play video ads were a key factor. "People believe that technology creates jobs in the tech sector and destroys jobs everywhere else," Facebook chief operating officer Sheryl Sandberg said in an interview. "This report shows that's not true."

According to Ms Sandberg, Facebook is helping create a new wave of small businesses in everything from fashion to fitness. She cited a group of young women in Bengaluru, India, who started a hair accessory business using Facebook and a mother in North Carolina who started the Lolly Wolly Doodle line of clothing, selling to customers through Facebook.

The report comes as many established industries are critical of Web startups such as ride-sharing service Uber and home-sharing service Airbnb. Critics contend that the services circumvent regulations and threaten established taxis and hotel businesses.

The report's data will provide Ms Sandberg with something to talk about when she travels to the World Economic Forum in Davos, Switzerland, this week. On Thursday, Ms Sandberg will be on a panel alongside Google executive chairman Eric Schmidt and Microsoft chief executive Satya Nadella about the future of the digital economy. "We're no longer in a place where large companies can create the jobs the world needs," Ms Sandberg said.