Over 300 Million Facebook Users. The Company`s Making Money

17th September, 2009 by caitas
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Social network Facebook made two important announcements at TechCrunch50. The first news was that the social utility keeps the main role in the top social networks reaching the figure of 300 million people who used it on a Global scale. The second announcement was linked to the financial statements of the company. Facebook`s cash flow became positive, meaning that this company is recording now profits.

The notorious social service recorded a number of 250 million users worldwide in July, thus, the information that they crossed 300 million registered people was just an increase waiting to happen. Even if many consider these figures the big news, the second announcement is more interesting and of higher importance.

In April, even if it was noticed that Facebook`s earnings before interests, taxes, depreciation and amortization (EBITDA) were very profitable for various consecutive periods, the company did not expect to record a positive cash flow for its operations before the year 2010. That year, in 2008, the organization had no expectations to register a positive cash flow due to the sum of $200 million which represented the gap between the break-even point and the figures of EBITDA. Reaching in the state of making money was planned to happen in 2010 due to the fact that Facebook invested large sums during a long period in acquiring servers for their network. However, accounting methods allowed the organization to spread the invested money over periods. Nonetheless, reaching the number of $300 users or diminishing investments surpassed the costs incurred by the company and triggered a positive cash flow, enabling Facebook to make money. This is a great thing since the organization became more profitable a year earlier than planned.

The decrease of the costs incurred by the company is due to projects such as Haystack. This project has as scope the cost-effective storage of shared photos on this social network. As it is acknowledged, Facebook is the biggest website allowing the sharing of photos.


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