Facebook isn't just a tool for college students to socialize.
Now every demographic uses the website, making the service a key way for companies to reach consumers.
What better way to target ads than with the information you give about yourself on your profile?
Just five years ago CEO Mark Zuckerberg started Facebook in his dorm room, in 2006 opening the service to everyone, and allowing anyone to create applications for the site. Now things are decidedly different. Zuckerberg started off 2009 with the resolution to wear a tie to work every day, which seems to reflect a mature focus on revenue and profit. Zuckerberg sticks to his commitment to building a utility to help people around the world connect, but now he's increasingly acknowledging the question - What's Facebook really worth?
Facebook is growing revenue 70 percent a year and is on track to be cash flow positive in 2010. Board member and venture capitalist Marc Andersen says he expects Facebook to generate over $500 million in revenue this year. In 2007 Microsoft struck an ad sales deal with the site and invested $240 million in Facebook, giving it a $15 billion valuation. Then this May the Russian Firm Digital Sky Technologies invested another $200 million in the site for a two percent stake, giving the company a $10 billion valuation. In July DST offered to buy up $100 million in shares from employees, allowing them to cash out. This also gives DST an additional percentage and a half of the company without requiring Facebook to give up any more control.
Allowing employees to cash out removes some pressure on the company to go public. But all signs point to Facebook preparing for an eventual IPO. Chief Operating Officer Sheryl Sandberg is working on developing revenue models. This September a new CFO, previously CFO of Genentech starts as Chief Financial Officer of the company. In the June press release Zuckerberg points out that he was Genentech's CFO while revenue tripled, and "his success in scaling the finance organization of a fast growing company will be important to Facebook."