Facebook: idealism before profits

http://business.timesonline.co.uk/tol/business/industry_sectors/technology/article4974197.ece

Given the recent discussions we’ve had about the future of Facebook, I thought that the above article would provide some insight into the question that has been raised many times in our class: what are the company’s plans for making money? Given it’s current platform, the company does not have any real sufficient inflow of cash to support a business of it’s size, influence and capacity. The firm, which was once valued at $15 billion, is now only valued at $3.75 billion, a significant decrease in the small span of one year. While the company is expected to bring in about $300 million in revenues, mainly from display advertising on the site from a deal with Microsoft, it will have a negative cash flow of $150 million.

Despite such statistics, Mark Zuckerberg maintains that making money is not at all a motivating factor for the company and, rather than focus on increasing revenues, the company would rather build its brand and concentrate on the bottom line, which is to help “people connect with people and things that they care about”.

According to Zuckerberg, if the company is able to succeed in its mission and continue to connect people around the world, the long term benefits will be much greater than any short term economic profits. “The goal of the company is to help people to share more in order to make the world more open and to help promote understanding between people. The long-term belief is that if we can succeed in this mission then we will also be able to build a pretty good business and everyone can be financially rewarded.”

While I absolutely respect Zuckerberg for being true to his mission and resisting the temptation of huge monetary rewards, I don’t think that idealism is enough. The company undoubtedly needs to earn money in order to sustain business to maintain and grow this bottom line that Zuckerberg is working towards. While money may not motivate Zuckerberg, it is still a necessity and I wonder if he can afford to allow revenue generation to take a back seat. Zuckerberg’s product likely will not be able to realize his long term goals without more defined means of generating profit. Especially in times likes this, when companies around the globe are suffering from the current economic crisis, can Facebook survive? We can’t forget that Facebook is a business and it has to work like any other business. If it doesn’t, then it can easily fail.