Facebook Surpasses 225 Million Users

Facebook continues to go on a tear and according to our own statistics compiled with data provided by Facebook during interviews a couple months ago, we now estimate Facebook's total active user base to have surpassed 225 million. The company actually should have surpassed 225 million a couple of weeks ago but we've accounted for the possibility of a slight slow down in growth, although the company continues to attract millions of new users weekly. So how much is all this growth costing for Facebook? According to a report published by Data Center Knowledge yesterday, the current cost of Facebook's infrastructure is approximately $20 to $25 million a year. That's not too much for Facebook to sustain though. The company has repeatedly stated that they are projecting to have positive EBITDA (earnings before interest, taxes, and amortization) in the first quarter of 2010. The company is also so confident in their cash position that they turned down an $8 billion valuation term sheet according to Mike Arrington. The primary reason may not have been the desire for more cash though. According to Mike, "Facebook declined the term sheet based on the requirement of a board of directors seat, says our source, and not the valuation." Mark Zuckerberg has been adamant about holding a majority position of the common stock board seats for a long time now. It's potentially based on advice received from Sean Parker who helped Mark Zuckerberg learn about raising money from venture capitalists as Matt Marshall describes in December of 2006: Parker soon met Mark Zuckerberg in New York, after the young "Zuck," as he is known, had launched Facebook. Parker helped Zuckerberg learn the ropes. He helped him raise money at great valuations - ticking off several VCs who'd wanted in on the deal. They first raised seed money from the Founders Funds' Thiel, who Parker had met through Sequoia's Michael Moritz - an irony. Facebook raised only $500,000, and it was profitable immediately. Facebook's traffic rocketed, and the company went in red again after taking more venture capital from Accel Partners to expand. While Zuckerberg has been widely acknowledged as Facebook's leader, even by Parker himself, there's little question Parker helped Zuck keep control and ownership. Zuck loves coding, so with Parker's business sense the two were a great pair. Parker helped bring in Owen Van Natta as COO. Parker was one of four board members at Facebook (along with Zuck, Thiel and Accel's Bryer). He hired former Napster employee Aaron Sittig to redesign the site as we know it. Parker obsessively negotiated with the owner of facebook.com to buy the domain. Parker also came up with much of what we see as the Facebook News Feed, and he believes that format is the future of communication on the Web. "The social graph," he says, referring to the connection people have with others through multiple degrees, "is the critical ingredient." Regardless of the rationale behind turning down the latest funding offer, Facebook continues to experience tremendous growth. As the company surpasses 225 million users, it continues on the path toward 300 million which it should surpass by the end of the year. MySpace however has flatlined and the pageviews may actually be declining at a substantial rate according to Mike Arrington. It will be interesting to see if the company can continue it's growth and maintain its title of largest social platform in the world.

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Facebook Surpasses 225 Million Users

Nick O'Neill

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Nick O'Neill