Facebook just announced it has crossed the 300 million user mark and that it became cash-flow positive last quarter.
“This is important to us because it sets Facebook up to be a strong independent service for the long term,” said Mark Zuckerberg in a statement.
A reminder: that doesn’t mean Facebook is generating “earnings” as they are normally defined. It means they’re bringing in more cash than they’re burning, which is actually more important.
The difference likely has to do with long-term costs (server farms, etc) that the company is depreciating over several years for tax purposes.
In the April, Facebook began letting press know that it expected to “operationally cash-flow positive including cap-ex”) at some point during 2010. Today’s news means the social network is well ahead of plan.
Our educated guess at why is that Facebook’s self-service advertising business is blowing the doors off.
Earlier this summer, we spoke to several sources with insight into Facebook’s financials. Taking the sources’ input together, we estimated the company’s expected 2009 revenue breakout this way:
- $125 million from brand ads
- $150 million from Facebook’s ad deal with Microsoft
- $75 million from virtual goods
- $200 million from self-service ads.
Here’s a message from Facebook CEO Mark Zuckerberg on the news:
300 Million and On
By Mark Zuckerberg
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.
Because we want to make it as easy and fast as possible for the world to connect, one of the things we think a lot about is how to make Facebook perform even faster and more efficiently as we grow. We face a lot of fun and important challenges that require rethinking the current systems for enabling information flow across the web.
The site we all use every day is built by a relatively small group of the smartest engineers and entrepreneurs who are solving substantial problems and each making a huge impact for the 300 million people using Facebook. In fact, the ratio of Facebook users to Facebook engineers makes it so that every engineer here is responsible for more than one million users. It’s hard to have an impact like that anywhere else.
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.
Over time, Facebook will continue to be as strong as all of the connections you make. We’ll continue building new and better things to make connecting with the people you care about as easy and rewarding as possible. We thank all of you for helping us reach the point where we are connecting 300 million people, and we hope to serve you and many more people in increasingly deep and innovative ways in the months and years ahead.
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