How Does Facebook Make Money?
This is an interesting article on Facebook and all the lawsuits that the founder is facing. Apparently, a few classmates of his at Harvard believe that he stole the idea from them and they want to be compensated for it.
The case against Zuckerberg, the facebook founder was supposedly settled for $65 million dollars, but his former classmates are still not happy with that sum of money are continuing on with yet another suit (this time they’re arguing that the amount was based on a low valuation of how much facebook was actually worth).
Most of my friends are certified facebook addicts and I’ve asked each of them if they ever click on the ad’s when they are on that site and all of them have said no. They don’t even notice them. However, companies are paying facebook a few million to have their ad’s appear on that site and I suppose that’s where facebooks revenues are coming from (but if people don’t start clicking on those ad’s, won’t those companies go elsewhere?).
The above link lists facebooks revenues as follows:
2007 Revenues: $150 million
2008 Revenues: $300 to $350 million (projected) – I don’t believe they actually made this much in ’08
2007 Headcount (aka “employee’s): 450
2008 Headcount: 1,000 (projected)
2008 Capital Expenditures: $200 million (i.e., servers) – What?!!
2008 EBITDA (earnings before interest, taxes, depreciation & amortization): $50 million
2008 Cash Flow: negative 150 million (essentially, they lost money)
So, it sounds like they’re not even breaking even. They’re operating in negative territory, but yet, someone has valued the company at about $15 billion dollars. Why?
I think they’re going to start charging people for some “premium” services. Would you pay?
You have to sell something directly, like Amazon.com; What does facebook actually sell? (directly?)
***Another interesting story from Dubai. Many expatriates who worked there for years, but are now being laid off, can’t afford to pay off their debts, so they are literally driving away (even leaving their car keys in the ignition at the airport).
In Dubai, if you don’t pay your debts, you can wind up in jail (it’s those funny islamic laws).
Heck…if I lived Dubai, I’d be on a plane outta there in a New York minute. No way I’m ending up in the big house for civil ebts.
I think this is going to start becoming more frequent — people just running away to places where they can chill out from hounding creditors.