Facebook Reiterates 70% Revenue Growth Projections, Though eMarketer Pessimistic

As Facebook grows, more analysts are paying attention to the company’s financial performance. While Facebook hasn’t disclosed much information publicly, it has shared some stats and projections – though not all analysts believe Facebook will hit those numbers.

Here’s what the company has said: Earlier this year, Facebook CEO Mark Zuckerberg said that the company is expecting to see “70% growth in revenue year over year” in 2009 and that Facebook will be “cash flow positive in 2010” based on current estimates. Then, last week, Facebook board member Marc Andreessen said Facebook would do $500 million in revenues in 2009.

Nevertheless, market research firm eMarketer isn’t as optimistic about Facebook’s revenues. In a recent note, Debra Aho Williamson, eMarketer’s senior analyst for social media, said she doesn’t expect Facebook to hit the numbers it has projected for 2009. According to Williamson:

Our estimate for worldwide ad spending on Facebook in 2009 is $300 million. That breaks down to $230 million in the US and $70 million outside the US. So if you add our estimate of $300 million in worldwide ad spending, plus about $75 million in virtual gift revenue, that equals $375 million. Assuming Facebook launches a payments system, that could bring in several million more in revenue (I don’t have a specific estimate on that).

The end result would still be lower than $500 million, and the reason for the difference is that while I am optimistic about Facebook, I am not as confident as Facebook is on its ability grow revenue 70% this year. With total US online ad spending slated to rise just 4.5% this year (according to eMarketer’s most recent projections) it will be an immense challenge for Facebook to increase total revenue 70%.

Just to make sure Facebook’s 2009 projections haven’t changed in recent weeks, we asked the company if its revenue growth is still tracking with projections.

“We don’t disclose revenue figures or otherwise break them down, but I can affirm that we remain on track to grow our revenue by 70% year-over-year,” Facebook’s Larry Yu told us.

Where is the $125 million Williamson is missing? We don’t know how she came up with her $300 million ad sales estimate, but we presume that number includes brand ad sales and performance ad sales, both of which are growing for the company. The $75 million estimate for direct to consumer virtual gift sales is in the ballpark of what we’re hearing. And while we have covered Facebook’s payment tests extensively, and do expect payment processing to become an important part of Facebook’s revenues, we do not expect merchant fees to significantly contribute to Facebook revenues in 2009.

It’s possible that Williamson’s estimates omit payments Facebook is receiving from Microsoft as part of its advertising relationship, or that eMarketer is simply more pessimistic about the growth in Facebook’s core advertising sales efforts in general (Williamson reiterates that total US online ad spending is only slated to rise 4.5% this year above). We’ll have to wait until Facebook shares more information before we really know how its revenues break down.

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