17 février 2009

For Facebook, More Users Are More Problems

A rule of thumb Valley insiders use is that adding a million users to a site like Facebook requires $1 million in capital. That means Facebook should be spending roughly $5 million a week on servers and other computing infrastructure. From what’s understood about its finances, Facebook is not covering the cost of its operations, let alone generating enough profit to pay for capital investments.

I want to get out of that industry.