Facebook eyes profit as it hits 300 million members
Facebook has announced that it now has 300 million users worldwide, and is finally making enough money to cover the cots of the site, beating its initial forecast.
“We’re succeeding at building Facebook in a sustainable way,” notes Facebook founder Mark Zuckerberg on the Facebook blog.
“Earlier this year, we said we expected to be cash flow positive sometime in 2010, and I’m pleased to share that we achieved this milestone last quarter. This is important to us because it sets Facebook up to be a strong independent service for the long term.”
He confirmed that the free cash flow number does not include any cash from private investment.
Analysts claim this shows the financial viability of Facebook, which has faced questions about its underlying business model, despite its popularity.
“It’s certainly meaningful to show that this is absolutely the real deal,” says Broadpoint Amtech analyst Ben Schachter. “They are executing. People are spending money on the site.”
It was a sentiment echoed by fellow analyst Collins Stewart, who believes Facebook may go public in the second half of 2010, or in 2011. However, Zuckerberg claimed in May that any IPO is “a few years out.”
Since its creation in a Harvard dorm room five years ago, Facebook has emerged as one of the internet’s most popular destinations with users tripling from about 100 million a year ago.
That led to a $200 million investment from Russian investment firm Digital Sky Technologies in a deal that valued the company at $10 billion.
Zuckerberg also noted in his post that the company is exploring ways to make the service perform faster and more efficiently as the number of Facebook users continues to grow. The company unveiled a revamped search engine last month and is currently testing an online payment system.