Techabia

It seems many are misunderstanding the situation over at Facebook Inc and how much money they’re actually making. We’re hoping this article will cover everything you need to know to discuss the topic with your peers.

Let’s go through a little briefing. Facebook is a social networking site that was founded (in 2004) by Mark Zuckerberg during his second year at Harvard University. It’s original name was “The Facebook”, a private social network for Harvard students. The site experienced heavy growth, and opened up to other ivy league schools, Boston area schools and eventually to most universities in North America. Led by company president Sean Parker (co-founder of Napster, the file sharing service), the name was changed to “Facebook” and the company was eventually incorporated in California in 2005. From there, Facebook grew into what it is today. In 2007 $300 million was invested in Facebook (of which $240 million came from Microsoft for a 1.6% share in the company). In 2008, a further $235 million was raised in debt and equity.

Now for our analysis. Facebook has 250 million users around the world, with 35 billion page views every month. It’s main source of income comes from advertising, and it is estimated that Facebook made $265 million in revenue from advertising during 2008 (that number is estimated to reach between $300 and $350 during 2009).

Their costs? With a little help from an article published by TechCrunch, we’re able to form estimations to answer that question. Below are both yearly and monthly costs:

Yearly Costs (with current growth):

Monthly Costs:

Keep in mind how much data Facebook has to store, and their total yearly cost totals to $388 million. There’s a reality check.