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More Users, More Money, More Facebook

With Facebook reaching 300 million users and now making money, is Web 2.0 saved?

It’s a milestone for Web, Web 2.0, and the digital revolution. Facebook is now cashflow positive. Some people might think with Facebook now reporting 300 million users, it would seem impossible not to make money given the size of the user base. It might seem cheap to host a Web site, but given the infrastructure need to operate a site with 300 million users, it seems a feat to now be cashflow positive after five and a half years.

Digital Overhead

So you might think, “Hey, I’ve got a Web site, it’s not expensive to run one of those.” To run something like Facebook you need hundreds of servers, backup servers, networking equipment, engineers, lawyers, media people, PR people, a warehouse for servers, backup generators, and the list goes on. As Mark Zuckerberg, co-founder, mentions, “the ratio of Facebook users to Facebook engineers makes it so that every engineer here is responsible for more than one million users. It’s hard to have an impact like that anywhere else.” I attribute the efficiency to the PHP language and open source databases like MySQL that Facebook utilizes.


Facebook is NOT using Microsoft tools or software. However, Microsoft owns a significant portion of Facebook. In fact, owning a portion of Facebook, I believe, will be their best business decision yet. Why? Growing competition from Apple, a downturn in the economy, the threat of the upcoming Google Chrome operating system, and the growing popularity of open source software.

Web 2.0 and the Unified Login

Okay, so Facebook is running smoothly and bringing in money, what’s in store for us now and why is it important that Facebook makes money? Facebook is Web 2.0. It represents everything Web 2.0 does well. It connects people via the Web in a social way, it easily enables sharing of information, photos, videos, and ideas. Facebook pioneers new technologies like the Facebook iPhone Application, Facebook Applications, Facebook Login, iPhoto integration, and software code to handle 300 million users and do so with speed. With Facebook staying in business, we are likely to see their vision of a unified login come to the Web – something Microsoft tried and failed at implementing. With a unified login, everything on the Web gets easier, including posting comments on this blog, shopping carts, digital IDs, and the like. The Web needs pioneers, and they need a reason to keep innovating. Finally, Web 2.0 can represent the age where the Web makes money.

[UPDATE: Facebook now has over 1.3 billion users.]

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Ken Morico

Consultant, Investor / Trader, and Entrepreneur

I’ve advised Fortune 500 companies, celebrities, startups, and high net-worth individuals while empowering millions online with insights on my blog and social media.
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