Report: Facebook raises '08 revenue projection
In an all-hands meeting, CEO Mark Zuckerberg details the company's finances with remarkable candor.
Kara Swisher at All Things Digital reported on Thursday night that Facebook held an all-hands meeting earlier in the day to talk company finances--and that CEO Mark Zuckerberg was remarkably candid.
The 23-year-old executive announced that projected revenue for 2008 had been elevated from $300 million to $350 million; that's a big jump up from its 2007 revenue of $150 million. For better or worse, the privately held company plans to spend $200 million this year on capital expenditures (as Swisher puts it, "a whole lot of servers"), and Facebook's employee headcount is expected to rise from about 450 to over 1,000.
The company's EBITDA (earnings before interest, taxes, depreciation, and amortization), according to Swisher's report of Zuckerberg's speech, will be about $50 million for 2008. With $200 million in capital expenditures, that means the company has a negative cash flow of $150 million. Numbers like that are the sort of thing that a more seasoned CEO might think twice about discussing semi-publicly; the dial-in number for remote access to the event was accessible enough that Swisher was able to listen in.
We're also at a point where confidence in social-media business models isn't exactly at a high point. Google's fourth-quarter earnings report on Thursday revealed that its advertising deal with Facebook rival MySpace.com hasn't been so lucrative.
Still, Zuckerberg has reason to be confident--for the time being. The young company is full of investor cash, including $240 million from Microsoft, that pegs Facebook at a staggering $15 billion valuation. Expect the IPO chatter to continue.