Facebook Crosses 300 Million Users and is Cash Flow Positive(techcrunch.com)
techcrunch.com
Facebook Crosses 300 Million Users and is Cash Flow Positive
http://www.techcrunch.com/2009/09/15/facebook-crosses-300-million-users-oh-yeah-and-their-cash-flow-just-went-positive/
9 comments
Cash flow positive at any point in time, even sustained for a few quarters, does not equate to "profitable". They have raised almost a quarter billion dollars. Their investors would likely want a multi-billion dollar equity event out of this, if that were even possible.
Those are very important financial points. It seems to me that the real estate business in the United States was largely cash-flow positive as recently as three years ago, three years after I was sure that it was all a bubble.
Those are very important financial points. It seems to me that the real estate business in the United States was largely cash-flow positive as recently as three years ago, three years after I was sure that it was all a bubble.
amazing, 300 million people can see something I can't. Am I the only person working in the tech field not to have facebook?
Congratulations indeed, what an amazing scaling success story. Every statistic I read about them is staggering.
Congratulations indeed, what an amazing scaling success story. Every statistic I read about them is staggering.
Facebook is most likely least popular in the tech industry, where people are more into "cutting-edge" sites or rely on older tools like email. That's why there's such an oft-lopsided view of them on HN.
There's nothing all that special about it. If all your friends/acquaintances are on it then it's great, otherwise it's not that useful. If all my friends were on twitter then I'd probably be using that instead.
I know that in this thread I'm playing the part of the outspoken Facebook fanboy, but: They entered a market competing against a site that was at a time the fourth-most used site on the planet, and in three years usurped its position, introduced an entirely new paradigm to how web sites worked, swiftly and mercilessly eliminated the trend towards theme personalization, redefined their design three times, added a slew of features that were ripped off by every site around them, and did it all without compromising its theme of "We know what we're doing, fuck you" and generally being right.
"added a slew of features that were ripped off by every site around them"
Yeah...that knife cuts both ways, doesn't it?
Yeah...that knife cuts both ways, doesn't it?
Facebook's adopting Twitter's ideas are different. I'm actually in the middle of writing why now; I'll post the link here if you'd be interested in my argument.
Don't troll for interest, it's unseemly. (I'm interested, please post the link.)
Sorry, I really wasn't. He asked me as I was leaving, and I thought it would be better to say that an answer was on its way.
For the most part I think Facebook's success can be attributed to these factors rather than any groundbreaking inventions.
1. Ivy League beginnings. It was easy to scrape together an audience due to the Ivy league exclusivity at the beginning. This solved the chicken and egg problem in a field dominated by MySpace, LJ, Friendster, Xanga, et al.
2. Harvard background: its easier to raise funding just because of the name.
3. MySpace's utter lack of progress especially by the time it was bought out by Murdoch.
1. Ivy League beginnings. It was easy to scrape together an audience due to the Ivy league exclusivity at the beginning. This solved the chicken and egg problem in a field dominated by MySpace, LJ, Friendster, Xanga, et al.
2. Harvard background: its easier to raise funding just because of the name.
3. MySpace's utter lack of progress especially by the time it was bought out by Murdoch.
0. Understanding relationships between people and making everything about that. Facebook friends are people you know. Of your three., number 1 is most interesting mostly because it is part of 0. By concentrating effort in one place, they solved the chicken-egg problem in a better or, at least, a unique and hard to replicate way.
There was really nothing more to discover about relationships that late in the social network game.
At that point in time, Facebook's networking features were equivalent to Myspace and Friendster, and still is today for the most part aside from some fancy bells and whistles.
The only way you could break into the market was to find a niche, and the Ivy league exclusivity at the beginning was that niche. Facebook was not a pioneer in this field as evidenced by sites such as ConnectU and Orkut.
At that point in time, Facebook's networking features were equivalent to Myspace and Friendster, and still is today for the most part aside from some fancy bells and whistles.
The only way you could break into the market was to find a niche, and the Ivy league exclusivity at the beginning was that niche. Facebook was not a pioneer in this field as evidenced by sites such as ConnectU and Orkut.
I couldn't disagree more. Facebook did several incredible things.
I will have to disagree with you. Their biggest technological achievement was the Facebook app platform.
While this was indeed an "incredible" thing, the question is, did this help make Facebook what it is today, or even attract a sizable audience?
The answer is most resoundingly no. Facebook was already very popular by the time most of these unique things were made, and in the case of Facebook apps, it even put off some users who were annoyed by its spammy nature.
While this was indeed an "incredible" thing, the question is, did this help make Facebook what it is today, or even attract a sizable audience?
The answer is most resoundingly no. Facebook was already very popular by the time most of these unique things were made, and in the case of Facebook apps, it even put off some users who were annoyed by its spammy nature.
They haven't done things perfectly (apps), but they did a few things that were enormous, not technologically but conceptually. They had a few incredibly brilliant ideas that made them as lasting and as sticky are they are.
Face book is going to be "dead" (ok, shrinking) in 10 years. If you look at social networks they are only sticky in the short term. Facebook's growth has hidden the fact that the average user does not stick around for 2 years and at 300 million users they just can't keep replacing people. And as people stop showing up it becomes less useful to those who stick around.
The pattern is simple, a new site shows up that let's you exchange info with people you have not talked to in a while. So you sign up and chat for a while, but you don't really care about those people so after a while going to the site becomes an annoying time sink and so you drop it. For a site that just has your core friends. But then you don't talk to people for a while and...
The only long term niche is to become the psudo holiday site, where people occupationally show up to chat with their extended social graph, but you don't really spend much time there. So, lot's of people, few page views.
PS: The people that "love" social sites and want to keep up with all their friends will jump ship as soon as something else becomes popular with most of their friends.
The pattern is simple, a new site shows up that let's you exchange info with people you have not talked to in a while. So you sign up and chat for a while, but you don't really care about those people so after a while going to the site becomes an annoying time sink and so you drop it. For a site that just has your core friends. But then you don't talk to people for a while and...
The only long term niche is to become the psudo holiday site, where people occupationally show up to chat with their extended social graph, but you don't really spend much time there. So, lot's of people, few page views.
PS: The people that "love" social sites and want to keep up with all their friends will jump ship as soon as something else becomes popular with most of their friends.
I know I got scolded for this in the other thread, but I disagree, and I'm working on a longer refutation of that "social network pattern." So give me a bit and I'll have a response for you.
Time will tell I suppose. You may be right but Facebook's size and appeal outside of the normal social networking site market might make it different.
True. However, I don't have 10 thousand friends so I am not positive how shear size is all that important.
Size doesn't matter. Utility does. If Facebook were to start completely over again against the current competition, I think they would still rise to prominence without much trouble.
What makes Facebook different, in short, is that while other services offer a place to talk, Facebook is built as a utility in a way other sites aren't. It's the new big communication medium. The people that use it are using it as a replacement to email and IM. That's a huge deal, because it suggests Facebook has the potential to last as long as email has.
Your suggestion that people abandon things all the time is countered by AIM, which has been the prominent IM service for a decade.
What makes Facebook different, in short, is that while other services offer a place to talk, Facebook is built as a utility in a way other sites aren't. It's the new big communication medium. The people that use it are using it as a replacement to email and IM. That's a huge deal, because it suggests Facebook has the potential to last as long as email has.
Your suggestion that people abandon things all the time is countered by AIM, which has been the prominent IM service for a decade.
Size matters if you need it to become an enabler. You can't get sick of email and leave, for example. Backpackers are constantly using facebook to keep track of their rapidly evolving social sphere. You can rely on most of those you meet being on facebook. This lets you be confidant that you will be able to use facebook to meet up at a later time or organise to do something at some later point. It doesn't matter if you like writing on people's wall in this case. It's hard to backpack without it. That's a consequence of size.
If facebook is how office drinks get organised, you need ot be in on that. (size doesn't matter so much for that though)
If facebook is how office drinks get organised, you need ot be in on that. (size doesn't matter so much for that though)
Like copying Friendster? Or was it geocities?
Awesome achievement.
Awesome achievement.
If it had copied either, your snarky answer would have warmed my heart. So which of those two sites introduced the live feed to the Internet? Which one was based on granular privacy control? Or had the idea of connecting a "wall-to-wall" to handle discussions back and forth? Or created one of the most innovative ad systems since Google? Or added semantic data to its user relationships? Or created miniature overlapping networks for organizing?
They did make the theme-personalization mistake with the initial apps implementation, but they reeled it back in fairly well.
With the aid of some $700m
Posting links, photos, videos, are all painful with twitter. Not to mention the ridiculous 140 char limit.
Doing so requires other startups! twitpic twitvid bit.ly etc etc
Startups, to add features to twitter that should already be there :/ madness I tell you.
Doing so requires other startups! twitpic twitvid bit.ly etc etc
Startups, to add features to twitter that should already be there :/ madness I tell you.
[deleted]
Check out Posterous if you haven't already for a good solution to posting basically any file format to Twitter.
It's basically the only way I maintain online relationship with most of my non-technical friends. Most of them just use email and FB. If your only circle is tech savvy folks, then FB's value is probably not very high.
There's something sort of sad about this statement. Actually, now that I think about it, it was less sad when the site was feed-based. Important stuff bubbled to the top and I felt connected. Now that it's stream-based, it's just a flood of minutiae and the important stuff gets lost in the noise. My FB-connected relationships feel less weighty as a result. Weird!
It's not that great for deep personal conversations. But it is good for easily finding out whats going on in your friends and acquaintances lives. It keeps me connected to people I don't see a lot. It has usually been how I have found out about old classmates engagements and other major events.
I keep only 22 friends, and treat Facebook like an almost-private journal. Deep personal conversations work if you use Facebook like that. It's up to the user.
Personally, I would never trust facebook with my deep personal conversations.
What're they going to do? Tell my future kids what their dad wrote online? Publish a collection of Swear Words Unalone Invented Talking To His Friends?
Maybe after World War 3 the new global government will search through the 25 year old database and exterminate all past and present believers of <some religion>.
(Yes, I know, plain text emails to hotmail/gmail recipients would probably be just as bad as plain text private messaging on facebook. Protecting privacy is so bothersome that my efforts are pretty token. But I do try... because I don't comprehend the ramifications of releasing so much information.)
(Yes, I know, plain text emails to hotmail/gmail recipients would probably be just as bad as plain text private messaging on facebook. Protecting privacy is so bothersome that my efforts are pretty token. But I do try... because I don't comprehend the ramifications of releasing so much information.)
I try and live life a bit happier, under the assumptions that most things won't go wrong and the things that do go wrong will be recoverable.
Which means you're either refuse to use the way of communication your friends like or did not have many friends.
Facebook is not for communicate with a people in next block. It for links between countries and cultures (excuse me for this pathos =).
Facebook is not for communicate with a people in next block. It for links between countries and cultures (excuse me for this pathos =).
I would love to understand what the 300 million number actually means. Does that mean they've signed up 300 million users but only half are active or some other percentage or do they actually have 300 million active users..?
Active = logs in once a week?
Active = logs in once a week?
I believe it's the number of users who have logged in in the last month.
Facebook stopped measuring inactive users a long time ago. Anything you hear out of them refers to active users.
Anything you hear out of them refers to active users.
That's an interesting statement. Is there any way of independently verifying this? And is there any way of independently verifying churn of Facebook users who give up being active users by anyone's definition?
That's an interesting statement. Is there any way of independently verifying this? And is there any way of independently verifying churn of Facebook users who give up being active users by anyone's definition?
the majority of websites quote user numbers as the total number of users who have signed up (ourselves and myspace included, if i remember correctly) -- it's pretty standard. facebook goes out of their way to understate their numbers (compared to everyone else) and only talk about the total number of active users.
facebook goes out of their way to understate their numbers
As above, I find this to be an interesting statement, and I wonder how it could be verified. Is there a way for anyone outside of Facebook to identify unique users who post content in the most recent month? What means exist to check how many former Facebook users give up using Facebook?
As above, I find this to be an interesting statement, and I wonder how it could be verified. Is there a way for anyone outside of Facebook to identify unique users who post content in the most recent month? What means exist to check how many former Facebook users give up using Facebook?
Why does it need to be verified? Is it actionable? Basically it's a shitload of users.
Why does it need to be verified?
Well, why does anyone care in the first place?
Well, why does anyone care in the first place?
Touche.
Some stats to consider:
http://www.facebook.com/press/info.php?statistics
http://www.facebook.com/press/info.php?statistics
"More than 6 billion minutes are spent on Facebook each day"
Jeez, think of all of the valuable things that time could be used for instead of "looking at picture of people I don't know, but did go to high school with". sigh
Jeez, think of all of the valuable things that time could be used for instead of "looking at picture of people I don't know, but did go to high school with". sigh
The same can be said about dumb TV programs, flash games and even video games.
Never underestimate the "value" of "entertainment", especially on the internet.
Never underestimate the "value" of "entertainment", especially on the internet.
"More than 6 billion minutes are spent on Facebook each day (worldwide)"
How does that figure of about one minute per day for the worldwide population compare to time spent on such activities as talking on a voice telephone or watching television or World Wide Web use as a whole?
How does that figure of about one minute per day for the worldwide population compare to time spent on such activities as talking on a voice telephone or watching television or World Wide Web use as a whole?
So, now facebook would theoretically be the 4th most populous country. Damn. Countries like China and India have been around for thousands of years. And then, 3rd up, America: under 300 years. And facebook: 4 years.
Congrats to Facebook (and to the Facebook employees on HN)! This is exciting news and somewhat unexpected.
it's only unexpected if you've been solely listening to the "facebook sucks" and "facebook is a bubble" bandwagon that seems to be particularly prominent here on HN. there's been tons of news about their high revenue numbers lately and they've been approaching cash-flow positive for a long time now.
I was actually in the middle today of writing an essay about why Facebook isn't a fad, to counter that attitude a bit. I knew they had improved their revenue significantly, but I was under the impression that they had a ways to go.
What is a fad? Is their staying power in line with IBM or AOL or are they something completely new an unexpected?
If we define fad as "something that exists, becomes engrained as 'the way' or a 'hot item' in the vernacular for a period of time, then fades away" everything is a fad. IBM still exists, but their fad period is over. The same goes for AOL.
The services may not be fads, but their periods of rampant popularity are. All the talk and attention will fade when people discover the next big thing to coddle their self esteem and egos.
If we define fad as "something that exists, becomes engrained as 'the way' or a 'hot item' in the vernacular for a period of time, then fades away" everything is a fad. IBM still exists, but their fad period is over. The same goes for AOL.
The services may not be fads, but their periods of rampant popularity are. All the talk and attention will fade when people discover the next big thing to coddle their self esteem and egos.
I'm almost done with writing this thing! I explain better what I mean there, so hopefully you'll forgive me for waiting another hour or two and posting that.
Is their revenue entirely ad based?
They also let users send virtual gifts to one another for really low prices.
'gifts' being 64x64px icons that have been curated by Facebook staff.
Actually - someone pointed out to me recently that a 64x64px flower lasts a whole lot longer than a chocolate bar.
I think they worked better when Facebook offered them free to promote things. There were a lot of Dark Knight icons being passed around when the movie came out. I don't know any friend that's actually bought one.
Cash flow + means now web 2.0 ambitions are defensible.
Nah, web 2.0 was about the power of the social mind and collectivism. Facebook was actually one of the first sites to reject that mindset and focus on walling off their users. When I wrote for AllFacebook in 2006 I think I actually wrote something arguing they were closer to Tim O'Reilly's idea of web 3.0 or the semantic web, wherein all information is easily related to other information.
What I meant is that being cashflow positive means the new generation of web companies has a successful example to look to.
Cash flow positive at any point in time, even sustained for a few quarters, does not equate to "profitable". They have raised almost a quarter billion dollars. Their investors would likely want a multi-billion dollar equity event out of this, if that were even possible.
Facebook has become very deft at public relations in the last few years. Things like the "$15B USD Valuation" spin when Microsoft bought some ads are one example. I am very hesitant to believe that this announcement is anything more than PR based off of something like "well, if you look at the numbers just right at a point in time we can claim to be CFP...".