Facebook managed to make money

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Steve Chiotakis: The world's largest social networking site has a big status update.
It's making money. Facebook's announced it's now earning enough to cover its costs.
Marketplace's Amy Scott reports.

Amy Scott: You'd think, given how many of us use social networking sites, it would be a profitable business. But free sites like Facebook and Twitter and have struggled to turn our -- let's face it -- addiction into cash.

In a blog post yesterday, Facebook Chief Executive Mark Zuckerberg said the company is now cash-flow positive. That means it's bringing in enough revenue to cover its costs.

It's not the same thing as turning a profit. But analysts say it's a good sign that the business model might work. They say Facebook could be on track to go public in the next few years.

The company also announced it now has more than 300 million active users. That's triple its reach a year ago. All those eyeballs are attracting advertisers to the site.

But some are still skeptical the business model can work. After Rupert Murdoch spent more than 500 million dollars on rival MySpace four years ago, the site has struggled to stay afloat.

In New York, I'm Amy Scott for Marketplace.

About the author

Amy Scott is Marketplace’s education correspondent covering the K-12 and higher education beats, as well as general business and economic stories.


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