Financial Situation Not Dire at Facebook

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By Nick O'Neill Comment

This morning I posted about Mike Arrington’s article suggesting Facebook is almost in dire straits. At the time I suggested that things may not really be that bad and based on most reports, they aren’t. This afternoon Facebook contacted Venturebeat with a comment on the story:

As a matter of policy, we don’t comment on market speculation or rumor about our finances. Facebook is well-positioned both financially and within the market and any thoughtful attempt to model our business should reflect that. Our advertising business has great depth and breadth. While no ad business can ever be 100% recession proof, the breadth of our advertiser base and the innovative products we offer bolster our position in the current cycle. We’ve also been closely managing the business so we can continue to hire great people and scale. While we’ve achieved certain milestones, we are deeply committed to even greater business success in the future.

From the sound of it things are that bad. According to Caroline McCarthy the company has practically frozen its hiring for the time being and will remain at around 750 to 800, choosing not to hit its target of 1,000 employees by year-end. While the situation is not dire, it’s never a bad idea to get a little more cash while you can and that could explain Gideon Yu’s trip to Dubai.

The company won’t be going bankrupt anytime soon though and with the massive growth they are still experiencing I somehow doubt that raising a little more cash is anywhere close to impossible.

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