Happy Birthday Facebook! What About Those Happy Returns?

Facebook, the social network, birthday reminder, party inviter, video uploader, super poker, and general life updater is celebrating its 5th birthday. Co-founded by three Harvard friends in 2004, the worldwide network boasts 150 million users, dwarfing News Corp.-owned MySpace. But Silicon Valley is beginning to poke back, wondering when Facebook will grow up. “They need to grow out of their childhood really fast,” says Rob Enderle of the Enderle Group. “They have to grow into adulthood and adulthood means paying the bills.”

AFP’s Chris Lefkow talked with the Silicon Valley analyst about Facebook’s growing pains. “There’s no significant visible source of revenue other than investors,” says Enderle, adding, “There’s a lot of potential there but they’re still kind of living in this dotcom mindset where a business plan doesn’t make a difference. And as we saw with the dotcoms, that has a very unfortunate end to it.”

Advertising is the most obvious revenue driver, but Enderle says, “the ad model doesn’t seem like it works all that well for Facebook — though it could. You know an awful lot about people, and so you would think they could do targeted ads.”