Facebook '09 revenue neared $800 million

(Reuters) - Facebook's financial performance is stronger than previously believed, as the Internet social network's explosive growth in users and advertisers boosted 2009 revenue to as much as $800 million, according to two sources familiar with the situation.



The company also earned a solid net profit, in the tens of millions of dollars last year, one of the sources said.
That growth in profit and revenue underscores how Facebook is increasingly making money off its 6-year-old service, which ranks as the world's largest Web social network with nearly half a billion users.


That sort of performance is likely to whet the appetites of investors keen for a public share float, despite the company's insistence that an IPO is not a near-term priority.



Palo Alto, California-based Facebook, the booming social networking site dreamed up by Mark Zuckerberg and his buddies in a Harvard dorm room in 2004, is privately held and has released only very limited nuggets of financial information.


The 2009 results are significantly higher than some of the figures that Facebook had suggested earlier in 2009, as well as analysts' estimates that have appeared in various media reports.


Last July, Facebook board member Marc Andreessen told Reuters the company was on track to surpass $500 million in annual revenue for 2009. And in September, Facebook said that it had become free cash flow positive, meaning that the company was generating enough cash to cover its operating expenses as well as its capital spending needs.



Estimates in various media reports had previously pegged the company's 2009 revenue at $550 million to $700 million.
The two sources said revenue in 2009 was in fact $700 million to $800 million.


"They are downplaying their performance," one source said, adding that 2009 revenue was more than double the previous year's total. "There's no upside in getting people's expectations high, it's always better to go low."


If Facebook eventually seeks to go public, unveiling financial figures above expectations could help bolster investor interest.
Facebook declined to comment.




RATCHETING UP


Since its inception, Facebook has emerged as one of the Internet's most popular destinations.
The social network is increasingly challenging more established Internet players such as Yahoo Inc and Google Inc for consumers' online time and for ad dollars, even as it tries to strike a delicate balance between protecting privacy and promoting social sharing by its users.


In May, Facebook said it would introduce new tools to give users more control to limit how much of their profile information is publicly accessible, following criticism by privacy advocates about certain new Facebook features.




Facebook's backers include Digital Sky Technologies, Microsoft Corp, Hong Kong tycoon Li Ka-shing and venture capital firms Accel Partners, Greylock Partners and Meritech Capital Partners.


As investors wait for signs of a Facebook IPO, a vibrant market has developed for private shares of Facebook in specialized exchanges like Sharespost and SecondMarket.


Combining a large audience of Web surfers with innovative online advertising has become a recipe for super-charged revenue growth in the Internet business.




In 2002, after Google overhauled its AdWords search advertising system and introduced its cost-per-click pricing model, annual revenue quadrupled to $347.8 million. The following year, revenue surged to roughly $962 million. Google finished 2009 with nearly $24 billion in annual revenue.


Facebook's revenue growth has come as the number of users on its website has exploded. The company started 2009 with the January announcement that it had reached 150 million users. By December, that number had swelled to 350 million.




"We can provide really good, relevant advertising to people because they tell us exactly what they are interested in, and who they know, and those people tell us what they're interested in," Facebook Chief Executive Zuckerberg said at the All Things Digital conference this month.


He cited statements by other Facebook executives that the number of advertisers on Facebook had increased by a factor of four during the past year-and-a-half.


"Just having all those different ads in the system makes it so there's more to draw from and people get more relevant ads," he said.


Big brands such as AT&T Inc, Ford Motor Co and Blackberry-maker Research in Motion all advertised on Facebook during the first four months of 2010, according to Internet analytics firm comScore.


In addition to courting household names, Facebook also allows smaller companies to craft their own targeted pitches on its site, using a Web-based self-service advertising system.

Paying for College

How to Cut College Costs by $5,000

Colleges that lock tuition at the freshman rate can save parents thousands

As many colleges announce painful tuition hikes for the coming academic year—about $2,500 at UCLA, about $1,000 at the universities of Virginia, Georgia and Washington—students and parents at a few dozen other colleges don't have to worry about tuition inflation.

[Read about other ways to protect against tuition inflation.]

That's because all public universities in Illinois and at least nine private colleges around the countryguarantee entering freshmen that their tuition prices won't rise during their four years. Of course, these schools do typically raise other fees or costs, such as dorm and cafeteria charges, every year. Plus, they raise the tuition they charge each successive freshman class.

Colleges typically offer "tuition guarantees," "tuition locks," or "truth in tuition" programs to to attract students and parents worried about paying for college.

But guaranteeing not to increase prices, when professors want annual raises and health insurance premiums keep jumping, can be costly to colleges. The College of St. Joseph, in Rutland, Vt., which launched a tuition guarantee program in 2009, figures the college gives up—and parents save—about $5,000 in tuition increases over a student's four years.

As the economy and investment markets tanked in recent years, some colleges decided they couldn't afford to give up that revenue, and scrapped tuition guarantee programs. (Colleges are honoring commitments made to previous classes, of course.) After just three years, public universities in Georgia stopped offering flat tuition to freshmen entering in the fall of 2009, for example. Pace University andCentral Michigan University decided they could no longer afford to shield students from tuition price hikes in 2007.

Fixed-price colleges often try to make up the costs of the no-price-increase guarantee in other ways. Tony Pals, spokesman for the National Association of Independent Colleges and Universities, which represents private colleges, notes that many fixed-tuition colleges "have to increase tuition for each subsequent freshman class at a higher-than-average rate."

In addition, there are typically a few strings attached to limit colleges' losses. Most only guarantee flat tuition for entering freshmen for four years, for example, so students who take extra time eventually have to pay higher rates.

Some of the fixed-tuition colleges are also some of the most expensive. George Washington University, for example, has been one of the nation's priciest colleges for years. Its 2009 tuition of about $40,000 was about $15,000 higher than the average private college's tuition last year. The total cost of attendance, including books, living expenses and travel, for freshmen entering in 2010 is nearly $56,000 for those who receive no financial aid. (That scenario applies to only about half of GW students. GW reported to the federal government that 53 percent of its undergraduates receive grants, averaging a little more than $22,000 apiece.)

Other fixed-price colleges, such as the public universities in Illinois, however, remain comparatively affordable. And parents can hope that more colleges will consider adding the option. Susan Englese, admissions dean at the College of St. Joseph, said her college adopted the program in part because a few other small, private colleges that made similar promises, such as Hiram College in Ohio, believe the guarantee attracts more students. "Families are becoming really good consumers" about college now, Englese says. She has noticed parents of prospective students touring the campus often ask how much they should expect tuition to rise. The guarantee that parents won't have to worry about tuition increases for four years "helps us stand out," she says.
[See the list of colleges that  guarantee level tuition for a fee].
Searching for a college? Get our complete rankings of America's Best Colleges.

Reader Comments
 

practical reality
 

Advice to Parents

Do not waste your money paying for your kids education, instead set them up in a business, and when they are financially self-suportive let them decide if they want to go to college. There are many online degree programs that will save you money, you do not have to live on a college campus to become educated.Look at multi-millionaire business owners who never completed college and ask yourself what do they know that you do not? Bill gates, Micheal Dell, Steve Jobs and others must know college degrees are not a requirement to succeed in business.

Put your kids financial success and ability to survive as the first priority not the last priority. Degrees no longer guarantee jobs

justshootme

Big deal! what they give you with one hand they take away with the other! Example: what good does it do to quarantee tuition rates when in Calif. school system they are constantly revising the requirements and curriculum so they can milk more money out of the students! Turn regular 4 yr degrees into 6 yr degrees! Even commercial schools like DeVry do this all the time. No one is going to give you a guarantee that your college costs will be reasonable, predictable and affordable. I recommend you do a nationwide search and find the cheapest school possible, because no-one is going to give the students a guarantee of finding a job after they rack up over $100k in debt. Schools are now catering to foreign students because they know that they can return to their countries and find jobs unlike USA students who have to deal with job markets where no employer wants to pay American wages.Why else do you think Wally's world is the biggest employer but they only pay minimum wage. They are now exporting engineering jobs to China. Wake up and smell the bandini in this economy a college degree is no longer a guarantee of a good paying job.

Social Media Explained In 2 Minutes (10 Key Facts)

Social media is in the limelight and the topic of conversation in your office and with your friends.  You can read about it everywhere.  However, there are still people who do not quite understand what it is, and what its relevance is in our professional and personal lives.  The majority of people still do not know how it impacts our businesses, and how it can help with our campaigns.

There are times when we are asked to explain social media, and many times, we have a hard time. This especially happens when the person we are speaking to has not had the chance to experience the power of social media first hand. Most of my work deals with explaining this phenomenon and its impact on business growth and/or brand awareness. We use several methods to effectively explain social media, especially to our clients. There are two ways that are most effective in my experience. One is to use case studies and the other is to use facts and statistics. People can relate these to what they experience on a day-to-day basis.

Whenever I am asked to join a meeting to explain digital and social media, I find it easy to do. This is mostly because I am a blogger, a Twitterholic and a FaceBook user. Also, I use a lot of online tools which I personally test. However, what if you do not have the same experience that I have yet you want to start a conversation with your own clients or business partners? I have found a video that explains social media in 2 minutes using facts that explain why it is growing and why you and your brand should be a part of the social media experience.

Google Rolls out its New Web Indexing System: Caffeine

Google began its work on a new search index last year that was expected to launch somewhat in the beginning of this year. While that did not happen, the search giant has finally rolled out its latest and much anticipated Caffeine web indexing system.

Google boasts about its search indexing technology as capable of providing 50 percent fresher results for web searches than the last index, and that it is the largest collection of web content ever offered by the company.

“Whether it’s a news story, a blog or a forum post, you can now find links to relevant content much sooner after it is published than was possible ever before,” read the Google statement on the official blog.

Google outlines the motives for its next iteration to search products as efforts to cope up with the growing size of the content on the web and fully satisfy the customer demands of faster ways to find the latest relevant content.

Wish to know how it works? Here’s how Google explains its efficient Caffeine:

“Our old index had several layers, some of which were refreshed at a faster rate than others; the main layer would update every couple of weeks. To refresh a layer of the old index, we would analyze the entire web, which meant there was a significant delay between when we found a page and made it available to you.

With Caffeine, we analyze the web in small portions and update our search index on a continuous basis, globally. As we find new pages, or new information on existing pages, we can add these straight to the index. That means you can find fresher information than ever before—no matter when or where it was published.”

You may not experience the changes in your search results immediately but within some period of time. Also Google promises to bring more improvements in months to come when these modifications may become more prominent. Google is the most loved search engine across the globe and if continues to offer more enhanced search technology, it will easily sustain the lead against its rivals.

Is Facebook Getting Bigger Than Google? [STATS]

According to the analysts at Hitwise, social networks in general are more popular than search engines in some parts of the world.

In fact, networks such as Facebook have been pushing hard against the biggest names in web search, including Google, for several months now. As Hitwise reported recently, Facebook’s overall web traffic pulled ahead of Google’s for the first time in the U.S. in March of this year.

Now, we’ve learned that in the UK, people are visiting social networks more than they’re visiting search engines. Facebook dominates the current crop of social networks, accounting for the majority (55%) of all social site visits. When compared to the wider web, Google gets around 9.3% of all web traffic, while Facebook captures just over 7%.

But when UK stats for all search engines were stacked up with data from all social sites, social networks accounted .55% more traffic than search engines. This is a first-time occurrence, but as you can see from the charts below, it’s a trend that’s likely just starting to take off.

Compare that graph with these long-term stats from Alexa showing global pageviews for Facebook and Google; we can clearly see that at least one social network is on the rise.

While social networks such as Facebook don’t pose an immediate threat to search engines for their core functionality — organizing the web and helping people find content — they do pose a large threat to search engines’ largest revenue source: advertising.

If you were Google, would these kinds of numbers be worrying to you? Do you think that search engines are, in some ways, on the decline? Or is Facebook’s meteoric rise simply changing the paradigm a bit more than we expected?

I am proud to go to India: Obama

Washington: U.S. President Barack Obama says he has to go to India to experience "all that India and its people and its incredible ancient culture have to offer."

Announcing his plans to visit India in early November at a reception hosted by Secretary of State Hillary Clinton for External Affairs Minister S.M. Krishna at the state department, Obama cited a quote from a European scholar who travelled to India more than a century ago. 

"Whatever sphere of the human mind you may select for your special study, whether it be language or religion or mythology or philosophy, whether it be law or customs, primitive art, or science, you have to go to India, because some of the most valuable and instructive material of the history of man are treasured up in India, and India only," he quoted the scholar.
"So I look forward to advancing our partnership, to experiencing all that India and its people and its incredible ancient culture have to offer," Obama said.

"So when it comes to the sphere of our work, building a future of greater prosperity, opportunity and security for our people, there is no doubt; I have to go India.

"But even more, I am proud to go to India, and I look forward to the history that we will make together, progress that will be treasured not just by this generation but by generations to come."

Earlier Krishna said that Prime Minister Manmohan Singh recalled very warmly his meeting with Obama in April. "He and over one billion citizens of India look forward to welcoming you and your family later this year."

"A very warm and heartfelt welcome awaits you and the family," he said. 

Intel announces new 'Canoe Lake' innovation platform at Computex

Intel rolled out a slew of new product plans at Computex this weekend, all packaged together in one announcement. But the one of the standout innovations is the ultra-slim Canoe Lake platform on the "world's thinnest netbook."

The Canoe Lake innovation platform was debuted at a keynote speech on the sharp-looking, 14-millimeter thin netbook pictured above. According to Intel, it is 50% thinner than any other netbook around at the moment. Capable of supporting single and dual-core Atom processors, the system is a prototype/reference of sorts, but we could be seeing something like this available by the holiday season.

Canoe Lake wasn’t the only Intel and netbook-related news. Acer’s CEO Gianfranco Lanci stated that future Acer netbooks and tablets powered by Intel Atom processors will be operating on the MeeGo open software platform.

While the MeeGo strategy is interesting, I can’t take my eyes off of that ridiculously-thin netbook above. Given that we don’t know any other stats about the machine combined with its groundbreaking portable frame, it’s probably going to end up on the pricey end. How much would you be willing to pay for such a computer?