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Facebook Raises Another $25M 197

Posted by ScuttleMonkey from the tech-money-is-back-in-style dept.
conq writes "BusinessWeek reports that Facebook has just raised another $25M from Venture Capital. Along the same lines, Rupert Murdoch has bought a minority stake in SimplyHired and just two days ago the social networking site, Visible Path said it raised $17M from Venture Capitals."
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Facebook Raises Another $25M More

Facebook Raises Another $25M

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    • Re:Venture Capitals? (Score:3, Informative)

      by TallMatt ( 818744 )
      Venture capitals are usually funds that invest in business ventures at various stages. Some funds invest in the "seed stage" of a new business to get them started. Others come in after the busness is already started and doing pretty well to help sustain further growth and development. Once the venture capital fund invests in a business, they esentially own a portion of the business, and will require that the money they invest be paid out at a certain time. They will also take a precentage of the profits
      • I think he meant what group / person put up the money ;-)
      • I think a bigger question is whether they have a business model and whether it is sustainable. With some of these companies the VC are funding, I just don't see the sustainability. I think YouTube got money recently, but I doubt YouTube will be worth anything once the money is gone.
        • YouTube has no ads, and is serving up terabytes of data a month. Apparently they're just burning through wad after wad of cash in hosting and server costs. Wait for the money to run out, and then see the 20 second ads at the start of each video, a la iFilm.

          Seriously, "Ooh, sharing! Folksonomy! Community!" but far too many of these VC firms are willing to part with cash, not really evaluating whether the community they are fostering is worth the millions it costs to keep running.

          I was discussing Facebook vs

          • You do have the issue of facebook is already very well established across college campuses. I think you could replace myspace that way, but facebook is as much of a tool as it is a networking site (in my state at every major university facebook is used extensively to locate high school classmates, organize parties, and contact classmates about projects, opposed to myspace which in my experience is only good for finding sex). Just like it being hard to switch people to Jabber, AIM, or MSN it would be extre
    • Are they a semi pro hockey team that oddly splits its season in Sacremento and San Jose?
    • The two biggest Venture Capitals are the Bay Area and Boston. :)
  • What's with these storied marked red and "under construction?"

    Any else see that?
  • Is facebook really that great? Everyone I know is on myspace, livejournal, and xanga.

    • Re:I don't believe it... (Score:5, Funny)

      by netfool ( 623800 ) on Wednesday April 19, 2006 @02:40PM (#15159228) Homepage
      Well, I think you need to be going to college in order to have a Facebook account. So, right there what, about 75-80% of Myspace users are ineligible.

    • Re:I don't believe it... (Score:5, Informative)

      by koweja ( 922288 ) on Wednesday April 19, 2006 @02:49PM (#15159313)
      Yeah, it is in some ways. Since it is limited to college students you don't get the pre-teen and young teenagers, so the quality of the pages is better. Plus Facebook uses templates for user pages so you don't have the fucked up and illegible pink text on fuscia background that you get on myspace, the background music, the scrolling text, etc. It's not perfect and there is a lot of stupidity and too many people trying to get 100,000+ people listed as thier friends.
      • There is, sadly, a high school facebook in the making.
      • "...so the quality of the pages is better."

        I want you read this statement again, then think about it.

        I will give into the possibility that there may be a tighter meathead to emo ratio.

    • Re:I don't believe it... (Score:5, Informative)

      by beefstu01 ( 520880 ) on Wednesday April 19, 2006 @02:52PM (#15159339)
      Just about everybody here at my college is on the Facebook, while damn near nobody does the MySpace/LiveJournal/etc... thing. Mind you that my school was one of the first to be on the Facebook, so that may have something to do with it.

      The Facebook is really nice compared to everything else in that it has a very clean and uniform layout. Also, it's a bit exclusive, and in general the signal to noise ratio is just a bit better than on MySpace. You're able to avoid the high school students (well, for the most part...)
    • Not to sound elitist, but I hope nobody _I_ know is "on" these sites.

      If myspace, livejournal, etc. have taught us anything, it's that there are a lot of self-absorbed people out there. I mean seriously... how many people in the world are really so interesting or important that they need to make an entire site dedicated to themselves and fill the content up writing about themselves, their hobbies, their favorite things, and their imaginary friends?

      It's sad really: the Internet leveled the publishing playing
    • Facebook is about the strangest thing I have ever come across.

      I don't know whether to call it great or frightening.

      It's a time waster more than anything. When I have work to do, and I want to procrastinate I read other people's Facebook profiles. Some of these people I know very well, other's just happen to be listed as my friend through odd circumstance or what have you.

      What's scary is that almost everyone in college has an account. I was back home the other day, and just for shits and giggles, I dug ou

  • does anyone else hear it? (Score:5, Funny)

    by beyonddeath ( 592751 ) on Wednesday April 19, 2006 @02:34PM (#15159178)
    If you listen closely in the future i hear a loud BANG! as if a big bubble popped. maybe its just me tho!
    • I hear it too. As though a million venture capitalists cried out, and were silenced...
      • As though a million venture capitalists cried out, and were silenced...

        Or as though a million venture capitalists lit a firecracker, held it in their hand, blew off their hand, smarted for a little bit, and lit a firecracker and held it in their other hand...

        We've learned (ok, apparently only I have learned) that ad revenue does not a company make. Google lives off of it but only because its products are truely innovative to attract and retain a large audience.

        Social networking is nice but not a hu

        • Or as though a million venture capitalists lit a firecracker, held it in their hand, blew off their hand, smarted for a little bit, and lit a firecracker and held it in their other hand...

          You're making the assumption that venture capitalists make money when their investments mature. Not so, that's the goal of their clients. VCs make almost all their money from managing other people's money, and when you're spending OPM any idea is a good idea.

        • Social networking is nice but not a huge money maker of any sustainable growth.

          Think about it.

          Here are the money makers:

          • Facebook serves up national advertising
          • Facebook allows users/local businesses to pay 5 bux to make localized announcements
          • Facebook now has a poster store

          Now consider the fact that Facebook will have a constant stream of incoming college freshman joining the site. Graduates (at least for a few years) will remain active, ensuring a separate stream of advertising revenue.

          These guys have a bus

        • We've learned (ok, apparently only I have learned) that ad revenue does not a company make.

          Apparently you haven't noticed broadcast radio, TV, print magazines, newspapers, free weekly magazines, billboards, bus stop signs, and probably a lot of other things that don't come to mind in 10 seconds or less.

          Those industries all are based on ad revenue. Some print media charge a subscription fee that doesn't approach the cost of producing the magazines/newspapers to give you a small barrier to entry so you don't

  • Where does all that money go? (Score:3, Interesting)

    by JaseOne ( 579683 ) on Wednesday April 19, 2006 @02:42PM (#15159241) Homepage
    I see all these startups raising rediculous amounts of money and everytime I have to wonder what exactly is the money spent on? Does anyone know? How many developers does it take to maintain something like FaceBook? Just how expensive can their infraastructure and bandwidth be? It just boggles the mind that a site like that can raise so much in venture capital andit is even harder to see how they make enough profit to be able to provide a return on that investment.

    Does advertising and/or subscription fees really make that much money for a site? I guess it is just tiny amounts of revenue but spread between LOTS of users.
    • Well, if it's anything like the bubble days of the dot com era, the idea's not to make a profit on the site, per se, but to make the investment back selling ownership of the site through shares to the public. Or, more realistically, they may be hoping to sell "up" to a bigger fish (like MySpace sold out), who would probably hope to also either sell "up" or sell shares to the public.

      Although who knows how much FaceBook makes. I was surprised to learn that WinZip was pulling in ~$23 MILLION/year [asharewarelife.com].

      • But winzip has low maintenance cost, and actually provides useful software. These social networking sites fail on both fronts.
        • What's the expenses for FaceBook? A room full of developers and hosting fees? (Or is there a large marketing budget? I'm not too familiar with the site, being a number of years out of college...)

          Also, WinZip's sales are in the face of Microsoft's inclusion of ZIP capabilities starting with Windows XP, IIRC, which came out when, 2001? I'm not saying that WinZip doesn't put out a useful product, but those numbers, to me, are impressive because over the past four years there has been a free alternative. (Gra

          • What's the expenses for FaceBook? A room full of developers and hosting fees? (Or is there a large marketing budget? I'm not too familiar with the site, being a number of years out of college...)

            I'm pretty sure Facebook doesn't spend much money (if any) on marketing. There's simply no need -- in colleges where Facebook has a presence its attachment rate is extremely high, and word-of-mouth will do enough marketing. I believe Facebook currently has a staff of around 70 people -- if you figure an average

          • Bandwidth isn't cheap. Nor are devs. A roomfull of devs and their bandwidth bill and I'd be surprised if it doesn't cost them a couple of million a year to stay in buisness.

            As for WinZip- first, it does more than just zip files. Secondly, not everyone runs XP- I know corporations that are still on 2K desktops nationwide. Thirdly, WinZip makes most of its money off corporate accounts- its less of a hassle to take out a site license for all computers than figure out which ones really need it.

            I'm sure
    • I have to wonder what exactly is the money spent on? Does anyone know?

      I know. The answer is http://www.hermanmiller.com/aeron/ [hermanmiller.com]
      • Those chairs are actually pretty cheap now, in comparison to other office chairs. You'd think that the fabric chairs would be hundreds cheaper, but actually the fabric simple-looking office chair that is in my office right now has a list price of $900. The Aeron chair can be bought new for $800 these days.
    • office rent, bandwidth bills, hardware, salaries, benefits, snacks and drinks, taxes, colocation, recruitment, utility bills, marketing, advertising, etc. etc.
    • They're hosting the photo albums of pretty much the entirety of the US college population. I've seen image server numbers go up to 500 and above, and that's probably conservative ... it's a massive operation, so I bet the money goes fast.

      The real thing I'm wondering is why they need VC at all given their high profile advertisers?

    • It's on facebook.com today. A while back it used to be on thefacebook.com because someone else had facebook.com. I suppose it took considerable money to pay off the domain squatter.

      This week they introduced Facebook Mobile, which lets you get some features (messaging, poking, basic profile info) via a shortcode. A US shortcode [usshortcode.com] costs $1000/month. There's plenty of random features like that that costs money.

      And then you have to realize how many effin' servers they must be running. Obviously the domains are vi
    • Judging by the efforts advertisers go through to get the attention of college students, such as handing out free samples on-campus or "free" gifts for signing up for a credit card, facebook.com offers access to a hot resource. College kids have daddy's wallet and not enough intelligence or will to restrict their usage. It's not only how much it costs to maintain but how much do you value the access, which is essentially unique? People normally don't join a whole bunch of social networks--it's like a tipping
  • What? Where is this money come from, and why do people think they can make money now over before? Before there were no proven business models, and fresh ideas, now things are all a carbon copy of whatever site Yahoo/Google just bought a few months back. I fail to see how they'll earn money in the long term, save for an aquisition.
    • I fail to see how they'll earn money in the long term, save for an aquisition.

      You just answered your own question. They hope to be bought by someone big who thinks they can purchase the brand loyalty of the existing userbase and shift it to their own brand.

      Plus, in Facebook's case, don't overlook the value of marketing data on millions of college students. Credit card companies alone will no doubt pay enough to reach these kids to make a healthy profit for the site.

  • students? (Score:2, Insightful)

    by celardore ( 844933 )
    I don't get where all the ad revenue comes from. These sites target the student demographic generally. Are students richer today than when I was in college or something?

    I barely had enough money for a beer - let alone for spending on some product that I saw advertised on Facebook.

    A call to my parents may be in order about the backdated pocket money I must be owed.
    • It depends. I met a LOT of SRK(stupid rich kids) at Penn State, but they are probably not the majority. The difference between when you went to school and today is probably lines of credit. Especially with the new bankruptcy laws in place, credit card companies are falling over eachother trying to market to college students promising free t-shirts, hoagies what have you. So kids(and I hate to say it, but I fell into this category too, then I got smart the hard way) are leaving college with huge amounts
      • Well, I wouldnt consider myself a SRK (nice acronym, coulda used that when I was in college). Went all 4 years without signing up for a CC. I answered phones at our help desk for beer monday, bought my own books, and paid for my education (at a small private uni) mostly myself. Still have plenty of loans, but the interest on the balance on those is a lot lower than all the frivilous purcahses I would have made with a credit card. Most of my friends wern't as wise. Hell, I'm a few years out and still don't
        • Hell, I'm a few years out and still don't have a credit card. Pay in cash, leave no trail :)

          While overextending yourself on a credit card is a worse proposal, not having a credit card is probably not that great of an idea either. Unless you're never going to need to borrow money (including for a car or house), it's a good idea to get a credit card soon after you turn 18 so you can begin building your credit. What I suggest to many people is to get a credit card and only pay for gas with it, or don't use

          • I don't know what it's like in the US, but in the UK a credit card gives you much better buyer protection than a debit card. A friend of mine recently bought something online, via PayPal, with her credit card. The vendor failed to ship it and didn't respond to her emails or telephone calls. I doubt I need to tell anyone here what PayPal's response is to things like this (wait for a month or two, and then we'll laugh at you and be happy with our commission). One email to the credit card company and they
    • Are students richer today than when I was in college or something?

      Probably not, just more willing to go into credit card debt. Also, it may be the whole, "Get 'em while they're young" approach. Sure, the college student may not be in the market for a BMW today, but when they graduate, are single, and making a decent living, then that pre-advertising might start to pay off.

    • Re:students? (Score:3, Insightful)

      by HarvardAce ( 771954 )
      These sites target the student demographic generally. Are students richer today than when I was in college or something?

      The 18-to-25 (i.e. college) demographic is one of the most sought-after demographics by advertisers. While they may not have as much money as the 25-45 demographic, they are much more susceptible to advertising at this age, and it is at this age that people begin to really attach to brands. If Jeep can get you to buy one of their cars at this age, then you're much more likely to buy a

  • Way to go Facebook. Each extra million brings you closer to your pie in the sky. [slashdot.org]

  • Facebook (Score:3, Interesting)

    by Anonymous Coward on Wednesday April 19, 2006 @02:55PM (#15159373)
    I really love facebook, the ability to find anyone at my school if I need to contact them or want to know more about them is great. However, it has so many other cool features: being able to find long lost childhood friends, uploading photo albums, announcing meetings and cool events for on campus clubs etc.

    The one thing facebook is really missing is a 'rate my professor' system. At the end of each semester a dialog should come up asking if you would like to rate your professors from that semester. Myspace has it for some reason, and some people at our school set up www.collegesucks.net but have professor ratings integrated into facebook is a no brainer.

  • damn! (Score:3, Funny)

    by utexaspunk ( 527541 ) on Wednesday April 19, 2006 @02:57PM (#15159385)
    I need to start my own social networking site! Apparently teenagers will sign up for anything, and people just throw money at you if you own one, no matter how obscure it is! Awesome!
  • They're trying to convert it to a big demographic study/advertisement thing. They recently have this area where you can pick your favorite brands or products. Who in the hell cares what products or brands are my favorite, and why would I advertise that from my profile unless I was being paid something for click-thru or whatever? Totally awful exploitation of the customer base, IMHO.
    • It seems like having people's interests on there is kind of the whole point of social networking though. I actually found things out about regular friends that I didn't even know by reading their Facebook profiles. But, I personally don't put all that much info on mine. And as soon as it turns into a glut of advertising I'll probably stop using it.

      And it's not exactly exploitation when people are giving up their information to build networks of friends. It's an exchange of value where both parties are ben

  • Facebook Justification for $25 Mil (Score:5, Informative)

    by lababidi ( 879163 ) on Wednesday April 19, 2006 @03:13PM (#15159508) Journal
    Facebook's infratstructure is getting overwhelmingly big. They included a photo uploading section because, well people obviously love photos. But their original plan was to distribute the photo load by allowing users to locally host their photos and use a program called Wirehog (I believe) to turn their computer into a share point. This failed because of the complexity and security. The also are looking to hire many people to code and develop as well as maintain their servers (stripped down fedora). I'm not sure what their profits are, but this 25 mil sounds really justified.
    • I think Murdoch paid $600 million for myspace. Even if we presume the next media billionare is only half as demented, unless they got well under 10% of the company $25 million will probably do very well. The VCs weren't buying this for the profits and dividends.
    • how can one need $25m for more or less creating a community with image hosting?

      yeah, they'll probably mostly use it for marketing, and that's fair enough

      but don't say that $25m can be justified by saying "oh, they're hosting images now!!!!11"

  • The future of social networking on the web. (Score:4, Interesting)

    by dominion ( 3153 ) on Wednesday April 19, 2006 @03:14PM (#15159521) Homepage
    To be honest, one of the reasons I started Appleseed [sourceforge.net] is because of all of the ads that people are bombarded with on sites like MySpace. The whole experience just seems crass.

    Right now, social networking is being approached as if the users involved are merely demographics, potential markets, or advertising recipients. And that's really kind of sad for a technology which has so much sociological, political, and even economic potential for change.

    I really honestly think that we won't see real social networking until we have an network of open source websites which all work together using some kind of standard commication protocol. Would the web itself have worked if there had only been six or 7 places to host a website? Where would email be if you had a dozen different proprietary methods for sending and recieving?

    Why is social networking any different? MySpace, Friendster, Facebook, as far as I'm concerned, these are all the proof-of-concepts, but they're not the way the future will look.

    Social networking, by definition, can not be monolithic and centrally controlled.
    • You mean something openid [openid.net]?

      also, your website spits out this:

      Warning: main(inc/header.inc): failed to open stream: No such file or directory in /home/groups/a/ap/appleseed/htdocs/index.php on line 2

      Warning: main(): Failed opening 'inc/header.inc' for inclusion (include_path='') in /home/groups/a/ap/appleseed/htdocs/index.php on line 2
      • You mean something openid?

        Yes. Appleseed will probably utilize openid.

        Warning: main(inc/header.inc): failed to open stream: No such file or directory in /home/groups/a/ap/appleseed/htdocs/index.php on line 2

        Hit refresh. I'm not exactly sure why Sourceforge has a problem with includes like that, but the problem is random and disappears by refreshing the site.
    • Social networking, by definition, can not be monolithic and centrally controlled.

      Man, I hate how I never have mod points when a rare truly insightful post crops up.

    • Great post. Great insight. Thanks.
  • There's nothing like the smell of burning Venture Capital in the morning!!!

    In-cubicle massages will be commencing in: 5...4...3...

  • Facebook, tool of the administration (Score:4, Interesting)

    by everett ( 154868 ) <efeldt@efeLIONldt.com minus cat> on Wednesday April 19, 2006 @03:39PM (#15159775) Homepage
    Before I begin, a brief introduction. I'm a member of a fraternity that in years past has run afoul of certain members of my schools administration, nothing terrible, but the end result being that we became unrecognized by greek life. This occured around 1998, and at the time we were a small chapter and nobody was really bugged by it. Since then we've done better with our recruiting and are again at a size where we've begun the process of being re-recognized with our campus' greek life; however, one of the major obstacles we had to overcome was our public image with the administration.

    We realised, as I'm sure lots of college students eventaully will, that it's not just students on facebook, but rather anyone that can get an email address from the school, including campus police, administration, greek life, etc.

    One of our brothers, notorious for his "liberal" views on drugs and alcohol (college kids do these things, even frat boys???) created a facebook group for our fraternity, and invited all the brothers to join. Several of whom were members of other groups with wonderful titles like "4:20 all day", "Keg stand team", "Party 24/7", you get the idea.

    One day we recieved word from the administration that they were considering us for reinstatement on campus, however they strongly suggested we cleaned up our facebook profiles before we submitted our paperwork because, this person felt, that the image we were presenting of ourselves was not conducive to our being reinstated on campus.

    I've heard worse horror stories where students have even been brought up on judicial charges for pictures posted to some facebook profiles.

    Also employers who are alumnus of universities on facebook have begun using it as a tool for researching potential hires, all stuff to keep in mind, and nothing on the internet is private so be careful what sort of image you project about yourself. While it might make you seem cool now, in four years time you may be hating yourself or that person you really aren't.
  • One of the things I've noticed is the same thing that happened with P2P apps once the legal issues started arising....they branched off.

    What happened then was that while the features and everything were all new and great, unfortunately the thing that had made those systems initially great was their large user bases. This is the same thing with social networking sites.

    What I'm wondering is if there are any plans for something that can merge the data between them...kind of like an aggregator between all of y

  • Never seen facebook. (Score:3, Insightful)

    by schlick ( 73861 ) on Wednesday April 19, 2006 @04:04PM (#15160029)
    I have been intereseted in the idea of social networks since the "6-degrees" days. I got a friendster account when it was new, before it sucked. When their network preformance was consistantly bad I switched to MySpace. Everyone of my friends is some one I've met in person, and the majority are people I interact with socially IRL regularly. MySpace will let you do anything pretty much on your profile. I hate it when people make god-awful pages, but that's the price you have to pay for openness and configurability. I've never been to the facebook site, because I've never been a college student. I guess it appeals to college students I'm not one so it doesn't appeal to me. Strange how that works. I have several friends who are in college and we use MySpace to communicate sometimes. I think the majority of people don't use myspace a tool for communicating with their friends as much as they use it as a substitute for pr0n.

  • Would it have been too much to ask... (Score:3, Insightful)

    by ncc74656 ( 45571 ) * <scott@alfter.us> on Wednesday April 19, 2006 @05:11PM (#15160566) Homepage Journal
    ...that the submitter (and editors, if the submitter forgets) put in a brief explanation of what Facebook is, and why we (the readers) should care about it? I have a vague idea of what SimplyHired is/does (it's kinda obvious from the name) and the article does manage to refer to Visible Path as a "social networking site." As it stands, the article is about as useless as a post about a new version of $OBSCURE_SOFTWARE_PACKAGE that doesn't bother saying what $OBSCURE_SOFTWARE_PACKAGE is or what it does.

    Some of the earlier posts indicate that it's yet another social-networking type of site, aimed at college students. For those of us who now work for a living, would it have been too much to ask to mention that in the article?

  • Fully Linked Version (Score:2, Informative)

    by Takuan ( 68706 )

    The poster neglected to link to the sites involved.

    Here's a fully linked version:

    "BusinessWeek [businessweek.com] reports that Facebook [facebook.com] has just raised another $25M from Venture Capital [businessweek.com]. Along the same lines, Rupert Murdoch has bought a minority stake [cnn.com] in SimplyHired [simplyhired.com] and just two days ago the social networking site, Visible Path [visiblepath.com] said it raised $17M [visiblepath.com] from Venture Capitals."

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