Facebook in the money

Filed in archive markets on June 21, 2010

How much money does Facebook make? Lots and lots of it.

BusinessWeek reports that the social networking site is now making as much as $800 million. With more than 500 million users, Facebook is a bigger country than the United States and Russia combined so the advertisers might be smashing down the doors to get in.

According to BusinessWeek, the number of advertisers has more than quadrupled since 2009 began. And as reported here, some analysts are saying Facebook could be worth $100 billion over the next five years.

These sorts of numbers are bound to get investors excited. There has been speculation that Facebook will do an IPO once its revenue crosses the $1 billion mark. If the numbers are right, and let's remember that Facebook has been guarded about its finances, we would expect to cross the $1 billion mark this year.

So when would there be an IPO? It's not that simple. Facebook founder and CEO Mark Zuckerberg told the All Things Digital conference earlier this month that an IPO won't be happening any time soon.

When you think about Facebook's appalling performance on privacy and the fact that Zuckerberg is 26 years old, institutional investors are bound to raise questions whether he is the right man for the job.

As an IPO draws closer, we can expect more questions to be raised about Zuckerberg's management style. He'll either have to deliver value, or step aside.