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Facebook Turns "Cash Flow Positive" And Serves 300Million People

     
5:44 pm on Sep 16, 2009 (gmt 0)

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Facebook Turns "Cash Flow Positive" And Serves 300Million People [blog.facebook.com]
As of today, Facebook now serves 300 million people across the world. It's a large number, but the way we think about this is that we're just getting started on our goal of connecting everyone.

We're also succeeding at building Facebook in a sustainable way. 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.
6:07 pm on Sept 16, 2009 (gmt 0)

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"cash-flow positive" - does that mean "profitable"? It's easy to make a company cash-flow positive but be losing money, is it that they just don't want to use any word with "profit" in it or are they messing with us?

Also, 300 Million users before turning a profit is surely a case of must do better on the moetisation front (which I'm sure they will). I'd be happy to help them in that respect ;)

7:44 pm on Sept 16, 2009 (gmt 0)

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If they want to be profitable all they need to do is improve their PPC ads program - a lot.
8:11 pm on Sept 16, 2009 (gmt 0)

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"cash-flow positive" - does that mean "profitable"?

No.

"Cash-flow positive" means that they are not any longer bleeding money; this trend could be reversed. Now they generate more money than they spend. If they had no debt, they would be indeed "profitable". However, as they had been losing money until now, they do have debt, and this is going to be "paid back" by the difference between revenue and cost.

It will in fact take a while until they reach true profitability, i.e. earning more money than they spend, and without debt. Quite a while, I guess.

9:42 pm on Sept 16, 2009 (gmt 0)

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Facebook will be dead long before they're in the green.
10:12 pm on Sept 16, 2009 (gmt 0)

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I stopped my Facebook campaign as the cost of the ppc ads got too dear for me. But they did work well.
Just too many fat cat companies bidding high for their ads to appear.
You have to wonder though that an outfit with 300 million users cant make money ! So how can anyone else ?
10:55 pm on Sept 16, 2009 (gmt 0)

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-- So how can anyone else --

Very easy, stop hiring Marketing GURUs that aren't worth their smell.

Insead of delivering a report to top DOG that only 7% of Florida residents buy your product, find out WHY they are buying it.

11:14 pm on Sept 16, 2009 (gmt 0)

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If I had 300 million users on my sites I'd be cash flow positive too ;)
12:11 am on Sept 17, 2009 (gmt 0)

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There's something oddly satisfying in knowing that my site earns me one hundred fold more per visitor than Facebook earns. Needing 300 million users to turn a "cash flow positive", that's hardly sustainable!
12:30 am on Sept 17, 2009 (gmt 0)

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And some Russian oligarch put in 100 mil recently !
11:13 am on Sept 17, 2009 (gmt 0)

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Turning cash-flow positive with 300 million users is like winning a 20 mile marathon after running a hundred miles.

- John

11:46 am on Sept 17, 2009 (gmt 0)

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"cash flow positive" goodness gracious PR can be quite sickening sometimes.
1:03 pm on Sept 17, 2009 (gmt 0)

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Met with Facebook EMEA in Dublin yest.

When a client spending 300K pm has a CPA of 300 on Google and 50 on FaceBook, that tells me all I need to know.

New Adwords Editor-type uploading software coming soon from FB which will make bulk PPC ad updating much easier.

3:55 pm on Sept 17, 2009 (gmt 0)

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There's something oddly satisfying in knowing that my site earns me one hundred fold more per visitor than Facebook earns. Needing 300 million users to turn a "cash flow positive", that's hardly sustainable!

Funny you make such a generalization. Zuckerberg has stated revenues are already in the "hundreds of millions" but he also stated the obvious direction of his company has been to sustain the explosive growth to lock in the "Social" hub aspect of facebook. After all, what good is being social if your limited to profiting before you establish yourself as a defacto social hub?

Look at it this way, google is projected to "only" have a negative cashflow of 171 million on Youtube this year and through the explosive growth of Facebook they weren't estimating a positive cash flow until 2010. obviously, facebook is doing something right :)

5:27 pm on Sept 17, 2009 (gmt 0)

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300 million kids with no money and the odd adult is still gonna be pretty tough going in the profitability leagues.

Add to that an "impossible to target by context" advertising program and you might just break even.

Lotta work for little dough though.

6:20 pm on Sept 17, 2009 (gmt 0)

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300 million kids? surely you have never seen facebook then.
6:48 pm on Sept 17, 2009 (gmt 0)

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[qoute]Add to that an "impossible to target by context" advertising program[/quote]
But you can target by other categories. And you can show pics in your ads.
I got far more hits from Facebook than GoogleAdwords !
11:38 am on Sept 18, 2009 (gmt 0)

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300 million kids with no money and the odd adult is still gonna be pretty tough going in the profitability leagues.

Are you confusing Facebook with MySpace?
7:06 pm on Sept 18, 2009 (gmt 0)

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Want profits? Stop spending on R&D. But all bets are on the riskier but calculated gamble of growth with huge payoff later compared to limited return of paying down debt and cutting expenditures.
2:38 pm on Sept 19, 2009 (gmt 0)

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Who wouldn't want to be in Zuckerberg's shoes though?! Although they may not be profitable they've had people throwing money at them, their user base is still growing.. monetisation is hugely important, of course it is, but I like his style, and the principle of building... I'm pretty positive that with all the talent and experience he can lay hands on, they'll be able to monetise it.. (well, I hope so for him anyway!)