Facebook: A Business Perspective

Facebook is an interesting company/website/service/way of life—take your pick on what you want to call it. Anyway, I wanted to take some time to briefly talk about Facebook from a business perspective. Facebook is about to register its 200 millionth user (if it hasn't already by the time I post this), yet has struggled to find a way to profitably monetize its user base. Apparently, Facebook's CEO, Mark Zuckerberg, says the company is focused on growth rather than making money at this point. To be able to do so is clearly a luxury during today's rough economic times. Anyway, an article titled "Is Facebook Growing Up Too Fast?" talks about this issue plus more by providing a thorough in-depth analysis of the company's performance. After reading the article it seems like Facebook is a little confused about its identity as a company. Its objectives seem to be a mix of Google's mission complimented by Twitter-like features both of which are made possible by their government-like control over our information as users. Facebook primarily makes its money through ads, but it's hard to fathom how much revenue they are generating. Think about it, how often do you click an ad on Facebook? If you're like me, that's almost never. In fact, a former colleague of mine at Google commented on his status the other day (a Facebook reference during a Facebook critique is a little paradoxical, I know) that he finally got an ad that he could relate to (a targeted ad) on Facebook. I'm not sure how long Facebook has to perfect its advertising system before investors start to ask for a return on their investment, but I hope its sooner rather than later—I spend too much time on Facebook anyway.