Facebook's Profitability

Forgive the blog hiatus - it's been a hectic week for Technorella work-wise. Anyway - an article from Wednesday's Wall Street Journal (you can only read the article if you're a wsj.com subscriber - sorry) discusses how Facebook, in its effort to become more operationally savvy and profitable, has poached a top Google exec, Sheryl Sandberg, to help grow the business.





Facebook has skyrocketed - check out the chart below that shows the increase in unique Facebook visitors since April 2006.

But, just how profitable are social networking sites really going to be in the long-run? Based on this article, it looks like very:

"Last year, Microsoft Corp. invested $240 million in the company, valuing the startup at $15 billion. That gives Mr. Zuckerberg a net worth on paper of at least $3 billion. According to comScore Inc., a Web tracking firm, Facebook had 101 million visitors in January, up from 25 million in January 2007."

I'm interested to see how the company will grow revenue-wise. How will it enhance ad revenue? Will games and video content become the site's profit centers? Social networking sites have clearly provided new ways for companies to reach consumers - particularly young consumers who aren't so easy to reach. My two cents? New advertising and profitability models will evolve to fit the site's "personality."