This link has been bookmarked by 29 people . It was first bookmarked on 31 Oct 2008, by someone privately.
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01 Oct 11
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05 Jul 09
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It costs a couple of hundred million dollars a year just to keep the lights on at Facebook.
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15 Apr 09
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08 Dec 08
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Facebook May Be Growing Too Fast. And Hitting The Capital Markets Again.
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06 Nov 08
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03 Nov 08
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There’s no doubt that Facebook is growing at a breathtaking pace. A year ago, according to Comscore, they had just 74 million unique monthly visitors and 35 billion page views. Today those numbers have grown by 118% and 74%, respectively, to 161 million unique visitors and 61 billion page views per month.
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It costs a couple of hundred million dollars a year just to keep the lights on at Facebook. But the real problem is keeping up with growth, particularly storage needs. Add another $100 million or more per year for capital expenditures, and you’ve got a company that’s doing exactly the opposite of printing money.
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eMarketer estimates $265 million in revenue for Facebook in 2008. That’s great, right? Well, not really. The company is still losing money - lots of it - at current revenues. And it’s not clear that revenue will grow as robustly as costs.
Most of Facebook’s growth is outside of the U.S. A year ago, according to Comscore, Facebook had 31 million U.S. visitors, about 42% of the total. Today, U.S. visitors have grown to just 41 million.
19 million live in Africa and the Middle East. 26 million are in Asia. Europe, with 48 million Facebook users, has a larger share than the U.S. Another 16 million are in Latin America.
Just one in four Facebook users come from the U.S. today.
As we wrote last summer, most of these international users can’t be monetized today. And to make things worse, bandwidth costs in those countries is generally much higher than the U.S. So the users cost more, and they don’t bring in any revenue.
That international growth might be ok if U.S. growth remained strong. But the U.S. market just seems to be tapped at this point, and gaining market share from MySpace is a battle. As we wrote in August, at current growth rates it will take Facebook 18 years to overtake MySpace in the U.S.
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Sources have told us that Facebook CFO Gideon Yu was in Dubai this week, possibly meeting with Dubai International Capital
, exploring fundraising options. U.S. investors, including VCs and hedge funds, aren’t interested or aren’t able to invest at the valuation Facebook expects. That leaves Sovereign Wealth Funds
as the only viable funding solution. And the window to get money from them may fast be closing, too.Which explains why Facebook may be looking for money sooner rather than later. If they don’t raise a big chunk of money now from someone who’ll pay whatever it takes to own a piece of Facebook, there may be a heavily dilutive down-valuation round for Facebook in the next 12-18 months.
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Brent SordylThe company is likely spending well over a $1 million per month on electricity alone, say experts we’ve spoken with. Bandwidth is likely another $500,000 or more per month on top of that. The company has earmarked $100 million to buy 50,000 servers this y
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02 Nov 08
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L@jost EU projectFacebook’s growth, thanks to all these user-created translated versions of the site, has probably exceeded even their own internal projections. And running this engine isn’t cheap.
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laura malitaFacebook’s growth, thanks to all these user-created translated versions of the site, has probably exceeded even their own internal projections. And running this engine isn’t cheap.
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31 Oct 08
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Gabriela GrosseckFacebook’s growth, thanks to all these user-created translated versions of the site, has probably exceeded even their own internal projections. And running this engine isn’t cheap.
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