Mediapost.com wote in its Blog:
Mark Zuckerberg is Time’s Person of the Year, and he has the cash to prove it, as Facebook is on track to collect $2 billion in revenues in 2010, according to Bloomberg — most of it from online advertising and the sale of virtual goods by casual game partners like Zynga. That’s more than twice Facebook’s estimated 2009 revenues of $800 million-ish; it also represents a significant upward revision of earlier estimates pegging 2010 revenues at around $1.5 billion.
In short, Facebook is outstripping even the most optimistic predictions of six months ago, and appears to finally be establishing itself as a going concern with a real business model — rather than just a neat idea buoyed by hope and Web 3.0 triumphalism. So I thought it might be interesting to survey some of the Facebook’s financial workings — because while the privately held company doesn’t release official results, we can still glean useful details from various sources.
No surprise, Facebook runs up some substantial bills to maintain its colossal network. This includes $50 million to lease data center space in 2010, according to a report from Data Center Knowledge — and that doesn’t include the costs of hardware or electricity (at about $1 million per megawatt per year, the company’s total electricity consumption probably runs about $6 million annually). It is also making long-term investments in its own data centers, including $215 million for a new center in Prineville, Oregon, and $450 million for an even newer center in Forest City in Rutherford County, western North Carolina. But with its balance sheets looking healthy, Facebook is having no trouble borrowing money to build for the future.
Of course, personnel costs have also grown as the company scales up, from just 300 employees in 2007 to over 2,000 today (the company moved into new headquarters in 2009). While the privately-held company doesn’t disclose specific financial results or employee salaries, Facebook has to pay a premium for top-end talent, with a base salary of $110,050 for new software engineer hires, according to Glassdoor.com. With around 400 engineers, that works out to $44 million — and that’s not counting higher-paid engineers or executive and administrative salaries. With overhead and other HR costs, it seems reasonable to assume Facebook’s total personnel costs come to around $100 million per year (not counting long-term stock options).
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