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Facebook tops 500 million users worldwide

The 6-year-old firm is already the most popular social networking site but aspires to reach 1 billion members. At its current growth rate, it could reach that goal within a year.

July 22, 2010|By Jessica Guynn, Los Angeles Times

Reporting from San Francisco —

Facebook Inc. on Wednesday issued its own eye-popping status update: The world's most popular social networking site had surpassed 500 million users.

And now, the Internet phenomenon that has transformed how the world communicates is eyeing another distinction — connecting one out of every seven human beings on the planet.

Six years after getting its start in a Harvard dorm room, Facebook said it was aiming to have 1 billion members, matching the reach of Internet search giant Google Inc.

If it can keep up its current breakneck pace, a feat that would defy predictions from analysts, Facebook could reach that goal by next year.

"We all love to dream big around here," said Randi Zuckerberg, the sister of Facebook founder Mark Zuckerberg who handles marketing. "We are going to take a day or so to celebrate 500 million users before we start thinking about going beyond that."

The site's runaway growth is nearly without precedent. Last summer, Facebook had 250 million users. It has amassed 100 million new members since February alone. Now if Facebook were a country, it would be the world's third largest.

All of which has lent credibility to Mark Zuckerberg's confident assertion that his company could almost "guarantee" growing to 1 billion active users despite a recent spate of privacy concerns and increasing competition from Google and others. Facebook defines active users as people who have logged onto the site within the last 30 days.

"I could have never imagined all of the ways people would use Facebook when we were getting started six years ago," Zuckerberg wrote in a blog post Wednesday.

Zuckerberg created Facebook as a place for college students to connect with one another. Since then it has been on a tear.

It eclipsed its former arch rival, News Corp.'s MySpace in April 2008. Facebook is the world's largest social networking site, shoulders above Twitter Inc. with 105 million users and LinkedIn Corp. with 70 million.

The privately held company does not disclose financial results, but people familiar with Facebook's finances said revenue, mostly from advertising, could top $1 billion this year, up from about $550 million in 2009 and $300 million in 2008. It has 1,400 employees at its Palo Alto headquarters and more than 12 offices around the world.

Crushing the competition has freed up Facebook to pursue an even more ambitious goal: connecting all corners and crannies of the world. Even as U.S. growth begins to plateau, Facebook saw its international users increase 73% in the last year alone, said ComScore analyst Andrew Lipsman.

In Portugal, for example, Facebook had a remarkable growth burst from 10% of the market in 2009 to 63% in 2010, Lipsman said.

"It just goes to show that in a very short period of time, Facebook has a powerful network effect," he said. "Once the site reaches that critical mass, it can really take off in a big way."

Two years ago, Facebook was available only in English, making overseas expansion more of a challenge except in English-speaking countries such as Britain and Australia.

Under Javier Olivan, who joined Facebook as head of international growth three years ago when the site had 30 million users, Facebook has encouraged its users to translate the site into more than 70 languages. Now Facebook is pulling even or overtaking social networking services in country after country, gaining traction in Europe, Latin America and beyond. Some 70% of Facebook users are outside the United States.

Facebook said Wednesday that it has grown to 12 million users in India and 6 million users in Brazil, countries where until recently it had only a small presence and battled Google's social networking service Orkut. Facebook has lagged in several major markets: Japan, South Korea and Russia.

Forrester Research analyst Augie Ray cautioned that Facebook would have to tread carefully to avoid creaking under the weight of so many new users and exponential expectations.

Privacy advocates in Europe have already begun to howl, particularly in Germany where strict data protection laws have also sparked inquiries into the practices of Apple Inc. and Google. Facebook is being investigated in Hamburg for collecting data on non-Facebook users from the e-mail address books of active users.

This week, the University of Michigan's 2010 American Customer Satisfaction Index E-Business report gave Facebook 64 on its 100-point scale, a ranking lower than that of the IRS and in the bottom 5% of all the private companies the report measured, which included airlines and cable companies.

Even companies that seem unassailable are not, Ray said.

"At times, it seems that no one can take them on given the amount of time people spend on Facebook," he said. "But we used to think that about big websites in the '90s, and some of those don't exist anymore."

jessica.guynn@latimes.com

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