Now it has hit 300 million users how much bigger can Facebook get?

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Zuckerberg.jpgI bet Facebook CEO Mark Zuckerberg has had a pretty broad grin on his face this week. For at the TechCrunch 50 conference in San Francisco the company announced it had reached two major milestones. Firstly it has passed 300 million worldwide members and secondly its monthly revenues now covered its costs and the company was starting to make money.

Zuckerberg had predicted that Facebook would be profitable by 2010 so it is starting to create income a few months ahead of scheduled. Making money in a period of economic downturn and, let’s not forget, the most depressed period ever for online advertising revenue is itself a very impressive feat.

Nick O’Neill of AllFacebook.com told the BBC “If the company can cover the cost of scaling to one billion users and still manage to break even, there’s no doubt that the company will have a great opportunity to rake in billions.”

It ought to be added that while Facebook is now making more than enough to cover its costs, that doesn’t include the money pumped into the site such as the £300 million it took from Russian investment vehicle Digital Sky Technologies.

Facebook has also had a huge growth spurt this year attracting another 50 million members in the last 75 days.This does of course beg the question – how big can Facebook get? Well much of its recent growth has been in its core markets of North American and Europe. Its levels of growth outside those spheres have been less impressive. There are some hot spots such as Indonesia, but in many big emerging country markets Facebook’s growth is limited.

One of the problems it faces is that in key territories there are already local social networking sites that have a Facebook style stranglehold already. In Korea Cyworld, with its 24 million members, has managed to keep Facebook and its rivals at bay. In Central America the big player is Sonico and further south in countries like Argentina Hi5 sets the agenda. There are also problems for Facebook in China where the authorities apparently perceive the site as very western and a unwanted influence on its people. Ironically Friendster, the original social networking site which predates Facebook and Facebook, is now performing well in Asia.

They key then to Facebook’s growth could prove to be India and its surrounding countries. It has been suggested that much of the reason for the launch of Facebook Lite last week was to push the social networking site in the region.

Zuckerberg and his team’s other big problem is keeping notoriously fickle Westerners coming back to his site. The acquisition of FriendFeed and the move to incorporate Twitter-style micro blogging elements on the site show that Facebook is ready to meet challenges to its hegemony head on.

It is worth remembering though that every big social networking site so far has peaked and then started to fall. In the UK Friends Reunited had spectacular fall from grace. Now even MySpace is struggling to reconnect with its audience.

Facebook’s one huge advantage over its rivals is the huge amount of content and data that users already have on their pages, so it makes it much harder for users to move to another site.

Overall though there may be a few wobbles in the Us and Europe in the next couple of years but with new markets emerging all the time Facebook is clearly going to continue to grow for sometime yet.

Ashley Norris

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