Kikabink News

According to TechCrunch, Facebook may become a victim of its own success. With a 118 percent in growth in unique million visitors - from 74 million unique visitors per month a year ago to 161 million uniques per month now (according to comScore) - the company is still not profitable. Which means it may need a substantial cash injection sooner rather than later to continue.

TechCrunch reports that with 750 employees and an estimated $10 million monthly payroll, along with $1 million per month for electricity, $500,000 per month for bandwidth, up to $2 million for each NetApp 3070 storage system it’s buying on a weekly basis, $15 million per year in office and data center rent payments, and $100 million earmarked for 50,000 servers… it all adds up to annual expenses of $200 million or more.

And while Facebook’s 2008 estimated revenue is $265 million, the company is still losing money at current revenues, with no assurance that revenue growth will meet or exceed the growth in costs.

Writes Michael Arrington:

“If revenues don’t grow substantially, the company’s runway of cash gets much shorter. 2008 revenues are likely $100 million less than the company anticipated a year ago. If the economic train really derails, Facebook could be in big trouble.”

If Facebook has spent most of the $500 million it has raised to date… and revenues don’t substantially increase… the company will need further funding. Which, according to Michael Arrington, it should grab as soon as possible.

Source: Michael Arrington, “Facebook May Be Growing Too Fast. And Hitting The Capital Markets Again”, TechCrunch, October 31, 2008

At least one social network knows how to make money: LinkedIn, the social network for business professionals.

Presumably because of both its desirable member base - professional and affluent - and the network’s ability to target them, LinkedIn has experienced enormous demand from companies wanting to advertise on the network. So much so that it’s able to charge CPMs (cost per thousand impressions) for display ads that start at $30 CPM and text ads from between $12 and $20 CPM. This is when most social networks are lucky to get $1 CPM.

Demand from advertisers appears to have prompted LinkedIn to launch its own ad network. It will also work ad network Collective Media (which targets high-end media sites) to let other select sites target its users when they visit those partner sites.

LinkedIn has 27 million registered users, far behind the 100 million Facebook has worldwide. But, TechCrunch points out, it’s not about quantity… it’s about quality.

It seems that LinkedIn’s ‘quality’ 27 million users offers advertisers a much more valuable audience - with members having an average household income of $110,000, 64 percent male, an average age of 41, and 49 percent ‘decision makers’.

Presumably advertisers expect to achieve a greater return on investment (ROI) money by advertising to these people rather than the members of other social networks.

Source: Erick Schonfeld, “LinkedIn To Launch Its Own Ad Network”, TechCrunch, September 14, 2008

On Monday, David Morin, Facebook’s Senior Platform Manager, announced that Facebook had reached 100 million users.

This was subsequently confirmed by Facebook founder and CEO, Mark Zuckerberg in The Facebook Blog.

Actually, that’s 99,999,999 users. I closed my Facebook account last Thursday. See today’s feature article for why…

Source: Marshall Kirkpatrick, “Facebook Hits 100 Million Users”, Read write Web, August 25, 2008, Mark Zuckerberg, “Our First 100 Million”, The Facebook Blog, August 26, 2008

Microsoft plans to spend just over $100 million to acquire semantic search engine company Powerset.

Powerset’s semantic or “natural language” technology aims to deliver search results based on what search engine users are really looking for, due to making meaningful connections between the words typed in by such users.

While Google is said to be using semantic technology to a limited degree, it has generally dismissed Powerset’s approach. Consequently, Google’s search results are still mainly based on the individual words typed in by its search engine users.

With the popularity of Microsoft Live lagging significantly behind Google and Yahoo, Microsoft’s purchase of Powerset is undoubtedly a bid to increase its share of search, based on delivering better quality search results. However, many believe that while theoretically appealing, semantic search is practically impossible to implement in reality.

Source: Matt Marshall, “Microsoft to buy semantic search engine Powerset for $100M plus”, VentureBeat, June 26, 2008

Is LinkedIn – the social networking site aimed at professionals and business owners the social site sleeper? While MySpace and Facebook receive much of the attention given to social network sites, LinkedIn is quietly recruiting more and more users, raising capital, and making money.

Last week, LinkedIn announced it had received $53 million in venture capital, mainly from Boston-based Bain Capital Ventures. This new financing round sees the company valued at $1 billion. That’s nearly double the $580 million that News Corporation paid for MySpace in 2005, although substantially less than the $15 billion value assigned to Facebook in 2007 when Microsoft bought a minority stake.

LinkedIn has only 23 million members (compared with estimates of around 115 million users of Facebook and MySpace respectively) but says that it’s profitable. Compared with Facebook and MySpace, LinkedIn also has more diverse revenue streams. Only about a quarter of its expected $100 million for 2008 will come from advertising; its other revenue streams include premium subscriptions (which allow users to directly contact each other without an introduction), recruitment tools that allow companies to find people who may not be looking for a job, and services specifically aimed at companies.

Personally, I have a LinkedIn account, although I have barely used it to its potential. My husband, on the other hand, has built up an extremely impressive LinkedIn network.

For Internet marketers, I see the best use of LinkedIn as a networking tool for establishing connections and potentially joint ventures.

Source: Brad Stone, “At Social Site, Only the Businesslike Need Apply”, The New York Times, June 18, 2008