Facebook turns a corner
Jinfo Blog

16th September 2009

By Nancy Davis Kho

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In a blog post on 15. September 2009, Facebook CEO Mark Zuckerberg announced that the social networking site had reached 300 million users worldwide (http://digbig.com/5bahcc). Even more newsworthy was the announcement that the free site, which has engendered head-scratching from industry observers over its lack of a clear revenue generation model, is now cash-flow positive, ahead of its previously predicted 2010 goal. According to Zuckerberg, "This is important to us because it sets Facebook up to be a strong independent service for the long term." That's important because it validates the site's ability to attract and hold users, despite its slowness to tap into revenue generating models. Once those new features - expected to include an online payment system - are rolled out, it's likely that profitability will gain momentum. Back in May Russian investor Digital Sky Technology ploughed $200 million into Facebook in a deal that valued the company's preferred shares at $10 billion dollars. The tripling of its worldwide audience in the 12 months since September 2008, along with the cash flow positive status, only underpins that sky-high valuation, setting the stage further down the road for a record-smashing IPO. The company is not resting on its laurels, of course. On Monday of this week a Twitter-like feature called 'Status tagging' launched, enabling Facebook users to include tags to their friends, groups, or events in their status updates, as a means 'to share in a more meaningful and engaging way, and connect with even more people.' And yesterday it threw open the doors on its developers just a bit wider (and upped its Open Source chops) with the introduction of 'Facebook Prototypes', analogous to Google Labs or a beta development site. Users can 'test any of the products and features we launch as Facebook Prototypes and then provide feedback directly to those of us who built them.' Having all those motivated testers can only be a good thing as the company strives to keep its audience of 300 million (and growing) engaged - and spending.

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