Lou Young from zdnet.com talked to Peter Thiel, one of the investors in Facebook , as well as a board member, at the Singularity Summit 2007.
Thiel told Young at this time Facebook is at about the break even place, as far as cash flow goes, determined by the ads being served on the platform at this time.
Interestingly, he also added Facebook will reveal "new aspects of its business model and advertising plans" over the next several months.
Thiel also said the site has around 38 million members at this time, while growing at a 3 to 4 percent rate compounded weekly. If that were to continue, in a year they social networking site could reach 220 million members.
If the site does grow even close to that rate, it will become increasingly important to put a business model in place, as costs continue to skyrocket from the growing number of members.
A lot of people believe because of its name recognition and being written about everywhere in the media, that financial success at Facebook is a slam dunk. In reality, they're coming to the crucial part of their existence, and there are no guarantees they'll succeed in that way.
Gathering people to a website is one thing, monetizing the site without losing members is completely different.
I'm not saying I think they'll fail. I'm saying it's not guaranteed they'll succeed. Investors are pushing for monetization now, and it remains to be seen whether a model appropriate for the community will be found or work.
The announcement of a business model won't be the determining factor either, it'll be the execution of that model over a period of time successfully that will provide the answer for Facebook.
I think it'll take a good year or so before we find out if Facebook is on the right track as far as monetization goes.
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