Scratch Facebook from the list of web 2.0 startups that don't make money. The world's largest social network said today that it has become profitable.
Co-founder and CEO Mark Zuckerberg said Facebook had crossed the 300 million registered-user milestone and that it had become "cash-flow positive" in the second quarter, ahead of schedule. Previously, Facebook had said it was targeting profitability "sometime in 2010."
Facebook's brand pages, such as this one for Pizza Hut, are popular with marketers.
This is significant for a number of reasons, but mostly because it has done so without a fully developed advertising business. Indeed while Facebook pages and groups are popular among brands, Facebook itself is still figuring out the right ad model for social networking, beyond low-cost display ads. Facebook's other revenue models are also nascent, including virtual gifts, commerce and a payments system now in testing phase.
The problem being now is that will this profitability for Facebook translate into actual returns for advertisers using social media. So far...not so much, but will this trend change?
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