Facing Up To Facebook's Value  

How many Facebook users does it take to make a profit? Based on the advertising rates Facebook proffers, the number would hard to overstate.

As a social network, Facebook.com has been a remarkable success. The site is gearing up to announce its 200 million milestone, roughly two-thirds of who come from outside the U.S. Its fastest-growing segment is not across younger demographics, as one might expect, but women 55 years and older.

Opimageerating at such a large scale isn't cheap. The social network has 11 offices worldwide and more than 800 employees. Outsiders have suggested that Facebook's burn rate is north of $200 million a year, a point that Facebook executives won't comment on. If the company's burn rate is even half that--say a mere $100 million a year--then it would make sense that it's seeking additional funding. A company spokesman tells Forbes that it is not actively seeking venture capital. But additional money could come from other sources.

In the meantime, here are some ways Facebook could raise $100 million:

--Show 34,100 ads to each U.S. woman on Facebook aged 35 and up, or convince all U.S. men aged 35 and up to click on 28 ads each.

--Show every U.S. high-schooler on Facebook 93,300 ads each, or get every U.S. college student on Facebook to click on 25 ads.

--Display 421,000 ads to each Facebook user living in Germany, or get all users living in China to click on 1,362 ads a piece.

Extreme as they seem, those numbers are derived using a public tool Facebook provides advertisers to estimate how many ad impressions or clicks their budget will get them.

Facebook launched its ad system in 2007 as a way for businesses to target advertising to the exact audiences they want to reach. But the way the economics play out can encourage exactly the opposite.

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Another related articles from Forbes.com :

  1. Facebook's Information Push
  2. Will Social Networks on the Web Ever Make Money ?

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