" On Tuesday, those concerns were momentarily quieted as Facebook announced that it’s now free cash flow positive.
This doesn’t mean the social network is a profitable operation yet. Rather, the cash it generates from advertising and other forms of revenue now exceed the cost of servers and other capital expenditures required to keep Facebook running. One-time costs, like the reported $50 million acquisition of Friendfeed last month, and operational expenses like personnel, are not included in this equation. Outside investments in the company, like the $200 million it raised from Digital Sky Technologies in May, are not accounted for either. "
So, it sounds like if they fired everyone and stopped buying stuff, they'd be profitable, if money kept rolling in as it does now.
I obviously don't know for sure, but I would guess that servers and bandwidth are cheaper than labour, for a company like facebook.
I'm involved in online ad campaigns for a number of medium sized advertisers. I would love for Facebook's advertising program and 'stuff for businesses' to get a bit better. I think I could get several $100 - $1000 budgets. It would be a fraction of what they spend on adwords, initially at least, but still significant.
edit: did some looking: http://www.businessweek.com/the_thread/techbeat/archives/200...
" On Tuesday, those concerns were momentarily quieted as Facebook announced that it’s now free cash flow positive.
This doesn’t mean the social network is a profitable operation yet. Rather, the cash it generates from advertising and other forms of revenue now exceed the cost of servers and other capital expenditures required to keep Facebook running. One-time costs, like the reported $50 million acquisition of Friendfeed last month, and operational expenses like personnel, are not included in this equation. Outside investments in the company, like the $200 million it raised from Digital Sky Technologies in May, are not accounted for either. "
So, it sounds like if they fired everyone and stopped buying stuff, they'd be profitable, if money kept rolling in as it does now.
I obviously don't know for sure, but I would guess that servers and bandwidth are cheaper than labour, for a company like facebook.