Facebook makes a profit

Here’s the question to ask if you’re wondering if something is sustainable: will it last?! By actually making a profit, Facebook has achieved a significant milestone. So many internet start-ups over the last decade have promised future profits – Facebook has actually delivered. It’s announced that there are now 300 million active monthly users from around the globe and that it has started making profits ahead of schedule.

Facebook hit the 250 million user mark back in July. It is estimated that the site is gaining about five million new users a week, or 50 million in the last 75 days. Facebook’s vice-president of engineering told BBC News, “We think 300 million is a just the first step on the way to get as much of the entire world on the social network communicating with the friends and family and the people they want to communicate with.”

Industry insiders are impressed by Facebook’s ability to grow at this rate and still be “cash flow positive”. And some people are estimating that Facebook might yet double, or even triple in size. The beauty of their business model is that growth fuels further growth - and that revenues come almost entirely from advertisers. The more people that join the network, the more advertisers are willing to pay.

Internet fads come and go, but Facebook is starting to look like it might yet be around in a few years time. Look out Twitter, said Ben Parr who is associate editor at the social media blog Mashable.com. “If Facebook continues to open up its platform and adopt Twitter’s best features, it could spell trouble for the Twitterverse. The world’s largest social network is on the warpath”.