Facebook has two very big pieces of news that they announced today at TechCrunch50. The first: They have crossed 300 million users worldwide now, extending their lead as the biggest social network. The second: They are now cash flow positive. Yes, from this point forward, Facebook is making money.
300 million is the obvious big news. But really, it was always just a matter of time before Facebook was going to hit the milestone. They hit 250 million back in July. Really, the much bigger news is the second item.
Back in April, we noted that while the company has been EBITDA profitable for several quarters in a row, they weren’t expecting to go cash flow positive on an operating basis until 2010. Back in 2008, there was roughly a $200 million gap between Facebook being cash flow positive and their EBITDA numbers. So why was it going to take another 2 years to close that gap? It’s likely because Facebook has been spending a lot of money over the past couple years on things like servers, but accounting rules allowed them to spread those costs over time. But the amount of money they’re pulling in has either eclipsed those costs earlier than expected or it isn’t spending as much. (Equipment spending for big storage servers tend to be lumpy).
Undoubtedly, projects like Haystack, which aim to cut the costs of sharing photo storage on Facebook have helped quite a bit. Aside from being the biggest social network, Facebook is also the largest photo-sharing site as well.
… and let the money printing begin…
I wish they go public soon so that they can print money for me too
I hope the DO NOT go public soon. The quarterly SEC drill has killed enough great tech companies, killed enough innovations, destroyed enough long term visions. I hope we find a new innovative way for have the public share a long term company success and provide investors a lucrative exit. ;-)
Color me dubious.
Facebook labs comes there. Really it would provide nice experience to test on the beta apps. Developers surely benefit from this. Feature letting to filter News Feed from the friend lists alone will make feeds more crisp.
Cash flow positive is a big news for social media!
definitely…but facebook won’t last that much longer…http://bit.ly/ZPSXh
http://bit.ly/ZPSXh
knoyce post, dbag.
nice one!
Yeah oh and watch out Exxon Mobil, I just invented a prettier oil rig. Your days are numbered!
Keep dreaming.
I wish they go public soon so that they can print money for me too
we could offer one stop service of electronic projects.
visit us at http://www.mokotechnology.cn
for more details.
It’s the biggest news in the whole history of web 2.0 actually. I am surprised this article only went to 105 comments or so. This is the most important news article in the history of Techcrunch.
IPO in 2010?
It took them 300 mil. users to become cash flow positive!? That sets a great example for the rest of us :-)
You can get cash flow positive by spending less and not focusing on growth. It’s a lot harder to grow at the rate they did and be the size they are now – and become cash flow positive.
I wish they were already public.
Once they get to a billion, they have to put one of those McDonalds signs on their site that says 1 billion users served.
+ 1
That would be so awesome!!
That’s some great news for Facebook and the rest of the social world — With enough hard work AND an awesome idea, money CAN be made and business CAN thrive. Nice job team.
There was no “awesome idea”. It was just to offer people a cleaner version of MySpace. What “awesome” feature do you see in Facebook that is worthy of a “wow cool!” moment? I like FB only because its clean…
…and because all my friends from college were there…
I’m not beating down on FB, but fact remains that most internet companies that succeed have a vague idea but superb execution. You can’t fuck up the latter part of the equation.
Actually Facebook’s core feature difference from MySpace, one which it has lost now, was that you could find people in the same class as you. Back when I was in college and Facebook was just starting to add new universities, that was what drove user adoption – you could contact classmates about study groups, assignments, schedules, etc. More than once Facebook saved me when I had a paper due and had lost some critical piece of instructions or book I needed.
You’re right, these days there’s not a lot of difference in the two. But what drove early user adoption was attacking a niche market – connecting college students and their classmates.
Exactly!
Congrats facebook! Proof that the digital economy is taking front stage.
Amen.
Well, I am more interested in how FB is going to properly leverage it’s user data to build long-term sustainable monetization strategies that don’t aggravate users. Secondarily, as open standards of private data portability evolve, what is the switching costs for leaving the FB network?
Let’s hope this isn’t just an AOL 2.0
nicely done. Although it would be nice to see some actual numbers ;-)
+1
They might be punking TechCrunch again, like they did with the Fax this photo feature.
ha. not this time. never again!
Watch out IPO Markets. We’re back.
Thanks for the help
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Was AOL ever cash flow positive? Don’t mean to hate…just making a point. I ♥ Facebook.
Um, yes. VERY. What point exactly were you trying to make?
That this does not mean that they are home free.
I agree with “my god” Cash flow positive for a cap-ex intense business is still just baby steps. I want to see the positive eps before I jump for joy.
It’s nice that they now qualify as an actual sustainable business, but the toughest challenge isn’t going to be getting to profitability. It’s going to be creating real economic value beyond their cost of capital. What’s the vision for earning real profits without charging for their services? What’s their “paid search” or even their “display” strategy?
agreed.
Nicely done. I am sure there will be a big party today :)
Profitability matters, as Facebook just leased another large chunk of data center space in Virginia. The lease starts in 2011, meaning they expect to fill two existing data centers in Virginia within the next 15 months. The cost: could be as much as $125 million over the life of the lease.
Data centers aren’t cheap. But with 300 million users, revenue can pile up quickly once the business model kicks in.
and when will the business model kick in? Right around over emigration to Mars in 2098 I suppose…
You’re an idiot, right?
no, but you are. and you are blind too. let facebook start rolling more ads to get positive, I will start looking for something else. nothing else out there?? oh well, dont worry someone will come up with something better shortly just like you had geocites and then my space, and then facebook, and then…
all I am trying to say is that thats the way it is. poeple will switch to something new and better soon. You rather fix your call for 10 years (constant updates to facebook) or would rather jump into that new shiny car just produced a month ago???
perhaps if facebook was a static entity, you *might* be right, but the site will continue to change and keep people interested. also, let’s not forget that people have invested a great amount of time into building a profile, uploading photos, finding their friends, etc…plus everyone is already there. why tear down shop and rebuild elsewhere? what’s the incentive?
another real issue with them is the way they alienate many, many users by disabling their accounts – then leaving the user no direct avenue to resolve the issue. just google “disabled facebook account” and see.
I used to be a huge brand advocate for them until it happened to me. I don’t see how you can ignore this issue the way FB is ignoring it. Check out the posts on Zuckerberg’s own page for instance. Profitability & respect for the userbase are directly correlated.
I would like to know the real status of Facebook users, there are still spammers, people that created a profile and forgot about it, company’s and organizations that created profiles.
Where do you think you could find a “real” number? And I’m also thinking about how many power users are out there? Facebook is open 24/7 in my browser and I’m probably active 2 hours a day I guess. How about you people?
You forgot about dogs. This is big on Facebook. My dog has her own account and she has over a hundred friends around the world, many of them dogs.
http://www.face...ok.com/cdecombe
Alright Twitter. The ball is in your court.
Haha, thanks for the laugh.
word….
Wow, they’re cash-flow positive…and it only took 300 MILLION users to get them there.
Am I the only one who thinks that they may need a better revenue model?
the scary part is that they still asume grow… I cannot imagine anyone being able to keep a cow of 300 mil people constanlt active. those numbers will drop like for any other service yahoo, geocites, myspace, hotornot, etc, probably (%30),
Can we see some numbers on this? Would be very interesting. But congrats to them that’s a pretty impressive feat.
Social Media grew like a disease and the creators are clueless on how to profit due to conflicts of interest.
There is now a way. It is launced in October. Combine the Microsoft chain letter concept with facebook and an online business model. Trust me here comes an eclipse of the small profits of Facebook.
The Russians must be “qvelling”. I want — on the friends and family list 4 the IPO.
When are folks going to realize that most www sites are like TV shows? No, not like television sets. Not like televison networks. Like shows. That come and go. And may be fabulously profitable for a time. But they need to make money when they are hot, not pretend they are building a business. The era of just dumping it on to the next investor is drawing to a close.
agreed
+2
When do they release facebook ads for your site and really start to piss off google?
You might want to define “EBITDA” for us peons next time. This isn’t the financial times.
Earnings before Interest, Taxes, Depreciation and Amortization
Or you could just Google it.You are on the internet after all.
Umm…thanks? I Googled it as soon as I saw the acronym. The point was that I shouldn’t have to.
Got to wonder if a clunky product like FB can go green then you should be able to make a go at just about anything – whether it works or not.
Zuckerberg might as well open his own mint. $$$$$
Investors: It’s difficult to monetize social networks.
Facebook: Done!
I’m very impressed with FB ads. They target the user profile extremely well, and the ad template and placement make for a good user experience.
Now the question is, How much stock should I purchase when they go public?
If FB ads were really good, FB would be wildly profitable by now.
Facebook Ads are fantastic, but they aren’t scalable at the moment. Just wait until they start rolling out the new interface.
Facebook ads are incredible. I’ve always wanted to discover the latest way to get a flat stomach or know how to earn $6,000 through Google ads. Somehow FB’s ad targeting technology read my mind!
I suppose the technology is only as good as the people using it :-)
LOL, so getting to 300MM users is easy? Um, if anything, this means that social networks need to come up with a real revenue model.
So what is their revenue / 300 million? Would love to know what an FB user is worth per year in top line
FB will never as efficient as Google in terms of revenue.
Recall http://www.forb...011topnews.html
”
Yahoo!’s problem is not traffic–in August it recorded 210 million “unique users” to its Web site. It claims to be “No. 1 worldwide in terms of unique users, reach and time spent” and that it had “a record 1.25 billion page views per day on average during September 2001.” Other measures place Yahoo! third behind AOL Time Warner (nyse: AOL – news – people ) and the Microsoft (nasdaq: MSFT – news – people ) Network.
”
sounds like Yahoo! all over again.
In before valleywag hate:
http://valleywa...-if-not-profits
Guys, a sample size of one does not equal a trend for social media.
Hundreds of other social media sites are cash flow hemhorraging. No doubt there will be a massive collapse of all the unprofitable sites as they struggle to gather eyeballs and find a way to monetize giving away services for free.
I just wonder HOW they make money – so how are their reveneu streams distributed? I really cant imagine, that its possible to make that amount of money with ads and that little fraction af virtal item sales. Its totally different to google. Their system kicks,because ads sell products, that users were already searching for… On FB users just dont want to be bugged with ads, but socialize. I just cant imagine, that this works right now, what was claimed to be impossible before..
So do they have a hidden revenu stream or are ppl just clicking madly on the ads?
They’ve since moved to more “sketchy” ads that convert a lot more, like work from home “make 149$ an hour on google” and “meet me today “.
That kinda stuff makes money no matter how bad you think their traffic is. Those bizop scams are doing better than ever w/ the bad economy and people getting laid off. A lot of social sites can make money if they really wanted to or had the right mind frame.
I guess beeing sketchy reamins the only way to make money with digital entertainment…
I’ll go out and have a beer now on this shock :-)
What an honor…to be cash flow positive. wait. my company was cash flow positive from day 1. Why did it take Facebook so long to do it?
By the way, my mother who only logs onto her Facebook account once every three months isn’t one of those 300 million users.
How much cash are you generating on day one, Bill?
Being cash flow positive AND having 300 million users is the magic.
Don’t be such cynics. What they have done needs to be lauded.
gogogogo facebook yeahhh
Would anyone pay $1.00 per month for something called Facebook Premium? No advertising, no harvesting of your data, no selling your data, richer, more interactive applications, less noise, more interactive, more personal social networking. Is the data harvesting / data selling /advertising the only way to monetize?
When pigs fly perhaps.
In a heart beat
Interesting. FB must not believe many people would be so inclined. It seems to me, however, that there might be a place for such an option. I can’t imagine FB is the “end all” of social networking. Seems more likely it will be the first draft of many to come. Who knows what the social network might become?
If users were going to pay to connect with friends, they’d use classmates.com or any other countless social networks that charge yearly membership fees. If they start charging I doubt there would be any biters. Web savvy users just ignore the ads, there’s no way they’d pay to make them disappear, and on the other hand if they were to make it mandatory monthly membership if even only for $1/month, many users would just leave and move onto the next social network. The problem with social networks in general is that they’re a dime a dozen, if one network does something you don’t like, there are plenty others that will have you. I mean when you think about it, Facebook itself wasn’t even a revolutionary idea, there were hundreds of social networks before them and there will be hundreds more after them.
Just one mans opinion, sorry for the comment hi-jack.
LinkedIn has premium accounts starting at $25/month. I wonder how that revenue model is working for them. They are certainly not hurting for traffic!
http://www.quan...din.com/traffic
How to embed Youtube video on your Facebook Wall
There are many applications created to allow you to link YouTube video to your Facebook profile. With the instructions below I’ve selected the YouTube application that is used the most by the Facebook community.
On your Facebook profile
Go to the navigation panel on the left
Select “Edit” next to Application. If you don’t see the Application you will have to perform a search. See “Option 1 in How to add video to my Facebook?”
This will bring up Edit My Applications Window
Click on Browse more applications
On the top perform a search for Youtube.
Scroll down and click on YouTube Video Box
Click on “ADD APPLICATION” button
Its going to ask you to confirm. Click on “Add YouTube Video Box” button
The YouTube Video Box application will now appear on the left hand side
Click on YouTube Video Box from the left navigation panel
On main page you will see four TABS (Home, My Videos, Friends Videos, Managed Profile, Add/Import Videos)
There are multiple ways of uploading video
Under the Home TAB. You can select one of the videos from the most popular list and Add.
Another way is to use the Add/Import Videos TAB
Within the Add/Import Videos TAB you add an url from YouTube or import your favorites.
Yes, Facebook is the biggest and is making money. I do not care for Facebook is not available for Chinese who live in mainland.
Why I can not reply?
woooow…very huge users !!
Well that’s a grt achievement for facebook in boththe terms .. users and monetary terms … in any case its beneficiary for Facebook..
Cheers,
Daina
This is what I speak, Factbook growing at an unstoppable rate.
As I said in another comment he makes with friendfeed?
It comes to something we do not know?
cash flow positive != profitable.
For example a company might be “cash flow positive”, but losing value due to depreciating assets, or a worsening market position, or issuing new shares/share options.
It’s better than being “cash flow negative” though.
Yeah… but I can I fax my photos from Facebook?
agree and have similar feeling. internet IS a product itself (like a TV set you tend to change rarely), but anything in it, its just a show, a program you watch. there were many before and many will change /come up in a future.
you would rather jump into something new and exciting or keep “playing” in facebook while it is… 15 years old??
MySpace anyone?? what are the news in MySpace corner recently??
You need to change their profile to, “Facebook is the worlds largest social networking site with over 300 million users.”