So it has been well circulated that Facebook would be bringing in approximately $150 million in revenue during 2007. Now, thanks to a conference call with Zuckerberg, Kara Swisher has released the 2008 Facebook numbers. The numbers are impressive yet it looks like Facebook is going to raise the expenditures this year.
According to Kara Swisher, Facebook is going to bring in revenues of around $325 million which is more than double than last year. In addition to doubling their revenue, Facebook is going to increase their capital expenditures to purchase more servers and attempt to more than double their workforce to 1000 employees. This is is going to result in a negative cash flow for 2008. Facebook has the money to spend though with investments from Microsoft and rumored investments from private investors and potentially Nokia.
However much money Facebook is making, many were questioning the logic of Zuckerberg to release their revenue projections for the upcoming fiscal year. This puts into question Zuckerberg’s ability to maintain his position as CEO of the company. So far he has been a shy individual who has successfully won over Robert Scoble. Robert Scoble hasn’t exactly been know for keeping the beat of the market though.
As such, we have to wonder if Zuckerberg can maintain his role as CEO or if somebody else will soon have to fill this role. Do you think Zuckerberg has stepped out of line with releasing private financial information? Do you think the investors will soon find an executive to fill the role of CEO?
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Even a young man like Mark knows that what he disclosed at the meeting is considered critical and usually-secretive information and would definitely be leaked out, so I think Facebook guys wanted this info to be out for some reason.
I wrote about it on my blog http://technozzle.com/?p=76
Comment by Baher — January 31, 2008 @ 10:41 pm
The main problem is the precedent it sets. Analysts and pundits will expecting such disclosures in the future, and if they are not forthcoming, or are hedged, this is the same as bad news. It certainly would seem to indicate that FB has no plans for an IPO anytime in the forseeable future. Based on 2008 est. $50 million EBITDA and an estimated valuation of $15 billion, the implied forward P/E ratio is about 300.
Comment by David R. Strachan — February 1, 2008 @ 2:11 am
Even a young man like Mark knows that what he disclosed at the meeting is considered critical and usually-secretive information and would definitely be leaked out, so I think Facebook guys wanted this info to be out for some reason.
I wrote about it on my blog http://technozzle.com/?p=76
Comment by Baher — February 1, 2008 @ 1:41 am
The main problem is the precedent it sets. Analysts and pundits will expecting such disclosures in the future, and if they are not forthcoming, or are hedged, this is the same as bad news. It certainly would seem to indicate that FB has no plans for an IPO anytime in the forseeable future. Based on 2008 est. $50 million EBITDA and an estimated valuation of $15 billion, the implied forward P/E ratio is about 300.
Comment by David R. Strachan — February 1, 2008 @ 6:11 am
Your post's title is not accurate (and worth fixing). Mark is not the source of the leak. One may disagree with how he manages his employees, but it was the person(s) that shared the dial-in number that showed an error in judgment. I'd bet that Mark is more disappointed in the loss of trust than he is actually revealing the numbers.
Comment by Greg — February 1, 2008 @ 8:28 am
Your post's title is not accurate (and worth fixing). Mark is not the source of the leak.
One may disagree with how he manages his employees, but it was the person(s) that shared the dial-in number that showed an error in judgment. I'd bet that Mark is more disappointed in the loss of trust than he is actually revealing the numbers.
Comment by Greg — February 1, 2008 @ 9:28 am
[...] far, Facebook’s model is unproven and when Zuckerberg spilled the beans yesterday about their projected revenues for 2008 it appears that they don’t expect much of [...]
Pingback by Can Social Networks Be Monetized Effectively? - Covering All That's Social All the Web — February 1, 2008 @ 9:57 am
Mark gave out the numbers because he has no other choice if he raises the employee numbers and they all become shareholders. If Facebook has more than 500 shareholders, they have to start reporting like a public company or do an IPO. This is one of the reasons Google had to do an IPO…. I believe.Plus, it's his company and though most private company's done share their numbers, doesn't mean he can't or that it's a bad thing. He said he wanted to be more open after the 60 minutes piece and maybe this is his start.
Comment by Duane Brown — February 1, 2008 @ 1:42 pm
Your agenda?
Comment by Mike — February 1, 2008 @ 2:23 pm
Mark gave out the numbers because he has no other choice if he raises the employee numbers and they all become shareholders. If Facebook has more than 500 shareholders, they have to start reporting like a public company or do an IPO. This is one of the reasons Google had to do an IPO…. I believe.
Plus, it's his company and though most private company's done share their numbers, doesn't mean he can't or that it's a bad thing. He said he wanted to be more open after the 60 minutes piece and maybe this is his start.
Comment by Duane Brown — February 1, 2008 @ 2:42 pm
Your agenda?
Comment by Mike — February 1, 2008 @ 6:23 pm