Facebook is among the kings of social media, when it comes to total users. But it’s lagging behind in the amount of money it makes because its focus is so much on customer growth. However, one of Facebook’s board members expects annual revenue to soar into the billions of dollars by 2014.
Facebook currently has 225 million users, and it is expected to generate an estimated $500 million in revenue in 2009, according to an article in Reuters, entitled “Facebook revenue to be ‘billions’ in 5 years: board member.”
In the article, Mark Andreessen, an entrepreneur who has invested in Twitter and is a member of the board of directors of privately held Facebook, says Facebook’s value is about to explode. He also suggests the company could earn more than $1 billion this year, but it’s wise not to because if it did it might end up like MySpace.
Several years ago, MySpace was the most-popular social network, but then it tried to turn its popularity into profits by adding more ads and not improving its content as well as it could have. Now where is MySpace? A distant second to Facebook. It’s losing members while Facebook is rapidly picking them up.
Facebook faces a delicate balancing act trying to please both customers and investors. Its investors include heavyweights like Microsoft, Accel Partners, and the Russian company Digital Sky Technologies. You can read more about the Russian investment in Facebook in my eHarbor Blog entry, “Facebook’s $200 million boost a win for social media.”
As I said before, Facebook has the power to transform social media. It might take a few years, but it will be exciting to see when Facebook finally comes into its own and becomes a stronger company.
The photo of Facebook’s headquarters in Palo Alto, Calif. is from Flickr, and it is the copyright of steven.walling.
