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Metrics: Facebook

By Raymund Flandez

Despite growing concerns over privacy, Facebook has surged to some 500 million members. With an IPO expected before long, the company is poised to cash in on that popularity. But what's Facebook really worth? Worth crunches the numbers.

Ever since then-Harvard student Mark Zuckerberg cofounded Facebook in 2004, its popularity has grown exponentially. The site’s average user spends an hour a day on the site to connect with friends and family and read posts from fellow users; only Google gets more visits.

From the start, the Palo Alto, Calif.-based company was attractive to investors. Four months after Facebook launched, competing site Friendster proposed a $10 million investment. More such offers would follow, and in late 2007 Microsoft paid $240 million for a 1.6 percents take in the company. Facebook has also fended off acquisition offers from Viacom ($750 million) and Yahoo ($1 billion) while striking deals with private investors for some $700 million in financing.

Facebook has hit some rough spots. While the information users share on the site is catnip to advertisers, the company’s Byzantine privacy tools have sparked anger among users and attracted Washington’s attention.

The responsibility of calming public anxiety falls on the shoulders of Facebook’s 26-year-old chief executive. Zuckerberg says that the company is in no rush to go public, although investors hope for an IPO in 2011.The company reported positive cash flow last year for the first time, and Zucker berg has described reports that the company would approach $1 billion in revenue this year as “not so far off.”

HERE’S HOW MUCH THE NOTORIOUSLY TIGHT-LIPPED COMPANY HAS RAISED, WHAT IT HAS BOUGHT AND WHAT IT SEEMS TO BE EARNING.

FUNDS RAISED

$50,000

In June 2004 Peter Thiel, cofounder and former CEO of PayPal, became Facebook’s first investor, pumping half a million dollars into the fledgling business. He’s been on the company’s board of directors ever since. A year later, Facebook received VC funding of $12.7millionfrom Accel Partners and $27.5 million from Greylock Partners.

$240 MILLION

The amount Microsoft invested in the company in October 2007 for a 1.6 percent equity stake, enough to edge out a Google bid and valuing the company at an impressive $15 billion. In return, Microsoft received preferred stock, with priority in getting paid before common stockholders should the company be sold, and became Facebook’s exclusive advertising provider.

REVENUES

$550 MILLION

Revenue generated in 2009, according to the blog Business Insider, including $125 million from brand ads, $200 million from self-service ads, $150 million from the Microsoft ad partnership and $75 million from virtual goods. The 2009 total—some reports put the number closer to $800 million—is an increase from $300 million in 2008.

$500+ MILLION

Facebook-associated revenue in 2009. This figure includes monies from transactions inside some half a million Facebook applications, according to Justin Smith of Inside Facebook, a resource for the Facebook developer community. The most popular Facebook games generated about $3 million each in monthly sales last year. These apps also sold $200 million in advertising, since they host ads promoting other apps; their creators get paid about 50 cents each time a user clicks on an ad. Facebook gets a cut of these revenues.

$1 BILLION

Estimated 2010 revenue, give or take $100 million.

$200 MILLION

The preferred-stock investment of Digital Sky Technologies, a Russian Internet holding company and investment group, made in May 2009 at a $10 billion valuation for a 3.5 percent stake. DST also bought about $100 million in shares from Facebook employees at $14.77 a share, allowing Facebook to keep its shareholder-base low and avoid having to disclose additional financial information to the SEC.

$210 MILLION

The amount venture capital firm Elevation Partners has invested in Facebook stock purchased from private shareholders. Elevation’s latest buy, in June, valued Facebook at $23 billion.

EXPENDITURES

$47.5 MILLION

Facebook acquired Friend Feed, a real-time news aggregator start-up, in August 2009. Since then, the company has acquired contact-importing start-up Octazen Solutions and photo-sharing service Divvy shot for undisclosed amounts. It also attempted to buy Twitter in a $500 million stock deal, but failed. Since then, Facebook has offered its own version of short-form messaging and status-update tools.