That rate card Valleywag published yesterday? As noted, it was from February. And, yes, February was eons ago, but who would have suspected that Facebook would have doubled its sponsorship rates in the meantime? Well, it seems they have. Valleywag’s Owen Thomas reveals the June rate card.
Let’s see, 150 group sponsorships times $300,000 per sponsorship for three months ($1.2 million per year), and you’re at $180 million in revenue. And that’s before the home page sponsorships. And the $200 million three-year display deal with Microsoft. Etc.
Do clients get discounts off the rate card? Usually. But even with the sponsorship rates set at half of what they apparently are today, director Peter Thiel’s $150 million 2007 revenue number looked reasonable. And the more pertinent question is what 2008’s revenue looks like. And 2009’s.
MySpace will reportedly do $800 million in revenue this year, only a couple of years after finally getting serious about selling ads. Facebook’s sponsorship rates have doubled in 5 months. Google’s doing $16 billion in revenue. Is it really so unreasonable to think that Facebook might hit a $1 billion run-rate within a year? In our opinion, no.
So here are our updated Facebook revenue estimates:
2007: $150 million ($200 million? $250 million? Who cares?)
2008: $750 million
2009: $1.5 billion
Could the company instead bomb, becoming the next Friendster? Could a recession knock online advertising down 20%-30%? Of course. But the mistake analysts have made consistently, since the beginning of Internet time, is to underestimate the potential of the winners–and overestimate the potential for everyone else.