Facebook in 'actually making money' shock

Facebook says it now has over 300m users - and it's even cash-flow positive for the first time.

Last Updated: 03 Nov 2010

Facebook revealed at a conference in San Francisco that it now has over 300m active monthly users – only a few months after passing the 250m mark. With the site allegedly gaining about 5m new users a week (where are all these people coming from?), founder Mark Zuckerberg is now setting his sights on a massive 1bn users. Even more remarkably, he also said that Facebook has finally started turning a profit, one year ahead of schedule, thanks to its growing advertising revenues. That’s not very Web 2.0, is it?

The growth in Facebook’s user base – which has now tripled in the last 12 months – has been extraordinary, not least because it seemed to us that lots of early adopters were getting a bit bored with it. And more significantly, the all-conquering social networking site reckons today’s figures prove that it really can be a viable business. Facebook now makes enough money from advertising to cover not only its operating expenses (it refuses to admit officially how many staff it has, perhaps because it doesn’t want to lose its cuddly start-up image, but apparently it’s in the region of 1,000) but also its capital spending, as it invests in its latest tricks and gadgets.

Next on the list is apparently a challenge to Skype: allowing users to have voice chats with each other over the platform. Internet rumours suggest that a US firm called Vivox has developed the new software; it’s apparently in beta version at the moment and could go live in the next few weeks. It makes a lot of sense as far as Facebook is concerned: it will improve its offering by providing users with another way to connect with each other, while commercially, it will provide an extra advertising channel and a platform for other voice-enabled applications. After all, Skype has almost 500m users, so there’s a big audience there (we imagine Skype will be pretty nervous about this, particularly given its ongoing difficulties over ownership and technology copyrights).

It remains to be seen whether Facebook can keep all these new users interested once the novelty wears off, and whether it can maintain its frantic pace of innovation and growth without crashing and burning. But Facebook certainly seems to have impressed the analysts today, and presumably this news heightens the chance of an IPO in the next few years. Meanwhile it will continue trying to spread its tentacles even wider – notably into the potentially lucrative markets of East Asia, where it’s still trailing well behind the local favourites. Though according to the BBC, the name Facebook sounds a lot like a Chinese expression that means ‘doomed to die’ (obviously hadn't read our Ten Top Tips). So we can’t imagine that does wonders for its popularity...

In today's bulletin:

Jobless count hits 14-year high - but is the rot slowing?
Could Lloyds be forced to give up Halifax?
Facebook in 'actually making money' shock
Next: It's a recession, not Armageddon
Dads to get more paternity leave (maybe)

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