Friday, April 10, 2009

Facebook is Growing and so is its Cost

Was raising $240 million from Microsoft more than enough for Facebook or raising $235 million in debt and equity was enough to escape the heat of recession. Jim Breyer, one of the board members from The Facebook said that, "we have enough of capital to provide employment to as many as people we want and we are not at all worried about the profitability of the company".

There is no doubt about the fact that Facebook is growing at a tremendous pace, but with it is growing the costs the company is now willing to go to the IPO's because of the low cash supplies in the market.

Facebook continues to enjoy its increasing popularity worldwide and having the marked growth of 118% visitors wise and around 75% growth in its page views which s a remarkable effort, though its popularity in US is not upto the mark increasing to 41 million from 31 million about 32%. Facebook is likely to spend around $ 1 million per month only on electricity.

The sources in Facebook said that Facebook spends around $ 500,000 per month on bandwith and is expected to buy 50,000 servers worth $ 100 million this year. All that equals to with other expenses comes to around $ 30 million per year plus datacentre and rent payments of $ 15 million that sums upto $ 45 million every year.

And why should we forget the trusted employees of Facebook with around 750 employees working day and night, the payroll is around $ 10 million per month. We can add another $ 100 million on capital expenditures. I wish they can donate some of their money for the war and flood victims.

Mark Zuckerberg : The Creator of Facebook

The question is from where they are able to manage such a huge amount of money? Advertisers which targets the international audience. This is the reason the CFO of the company, Gideon Yu is in Dubai these days in search of some extra fundings for the company.

Still you think Facebook has got plenty of money? Right? NO WRONG !!

Facebook is just praying that economy gets back to the position what it was in the year 2007 or else the company will runaway with the amount of cash very soon. They have grab more and more money as soon as possible because we all know that the economy is more likely to get worse by the end of 2010.

Do not forget to listen the famous Facebook Song

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