The Biz of Coding

Facebook Leads MySpace world-wide but lags in US where Ad-$’s are

by Ujwal Tickoo on July 27th, 2008

Even as Facebook is looking to find a way to make big money to equal the hype that surrounds it on the web, it recently surpassed MySpace as the world-wide King of Social Networking. According to ComScore (CNET report):

Facebook…pulled in 123.9 million unique visitors in the month of May, beating MySpace's 114.6, and 50.6 billion page views compared to MySpace's 45.4 billion.

However, e-consultancy notes, MySpace still leads in US traffic which is much more valuable to Ad Spenders:

While MySpace maintains a significant lead over Facebook in terms of US audience (73.7m unique visitors in May to Facebook's 35.6m), Facebook attracted 123.9m total unique visitors, solidly ahead of MySpace's total of 114.6m.

But this triumph over MySpace might be a hollow victory.

For better or worse, the majority of the Madison Avenue advertisers that upstarts like Facebook hope to court spend most of their dollars trying to reach consumers in the US.

Some international traffic is notoriously difficult to monetize and as many online businesses know, traffic from certain countries is virtually impossible to transform into revenue.

Although many brands serve international markets, as anyone who has sold online advertising will probably attest, international traffic is often a turn-off.

This means that Facebook will probably have to look beyond Madison Avenue in an attempt to monetize its international traffic.

Per Times Online Facebook's expected revenue in 2008 is around $ 300-350 m:

Among the details to be revealed by Mr Zuckerberg were that revenues for 2007 would be $150 million - as had been expected - and that revenue for 2008 would more than double to between $300 and $350 million.

He also said the number of employees would rise from the current figure of 450 to 1,000 in 2008, according to The Wall Street Journal.…A surprising admission was that Mr Zuckerberg expected the company's EBITDA - earnings before interest, tax, depreciation and amortisiation - to be $50 million in 2008, suggesting that it will have a negative cash flow of about $150 million next year.

He apparently added, however, that he was not concerned about EBITDA, because the company has sufficient cash reserves. At present, the company is understood to break even.

POSTED IN: Facebook