Facebook generates revenue primarily through advertisements. Advertisers pay Facebook using different models like cost per click (CPC), cost per action (CPA), cost per install (CPI), or cost per thousand impressions (CPM). Whether advertisements on Facebook are effective depends on properly targeting the desired audience based on factors like age, gender, and location. Facebook was founded in 2004 by Mark Zuckerberg and generated an estimated $800 billion in revenue in 2009.