Report: Facebook numbers exceed expectations ahead of IPO

Demand for advertising on Facebook is soaring, according to digital marketing company

Facebook earnings are growing faster than previously expected, and are on track to exceed US$2 billion this year, according to a Wall Street Journal report.

While Facebook officially says little about its revenue, its most visible revenue-generating sources are advertising and the cut its gets from the sale of virtual goods using its Credits currency. The largest chunk, by far, comes from advertising. In 2009, over 85 percent of Facebook's revenue came from advertising, according to an estimate by Business Insider.

Facebook advertising has seen a tremendous momentum throughout the last several quarters, and demand is soaring, according to a report from Efficient Frontier, a company that helps make digital ad campaigns more efficient. Today, advertisers want "to take advantage of the full capabilities in the Facebook Marketplace to engage with their fans and promote their brands," Efficient Frontier said. That helped increase the cost per click by 40 percent in the first quarter of the year, compared to the last three months of 2010.

Increased demand and higher costs for its advertising is good news for Facebook's bottom line. The company is now on track to exceed $2 billion in earnings before interest, taxes, depreciation and amortization in 2011, according to The Wall Street Journal. That is above the numbers from Facebook that circulated several months ago when Goldman Sachs Group and Russian investment firm Digital Sky Technologies invested in the company, it wrote.

The company is also laying the groundwork to further boost its revenue. Last week, Facebook launched the Deals on Facebook service in Atlanta, Austin, Dallas, San Diego and San Francisco. The service allows users to find discounts on local activities. Also, starting July 1, Facebook will require all social game developers on the Canvas platform to process payments through Credits, from which the company gets a 30 percent cut.

Revenue and sales growth will be key metrics when the company eventually decides to go public, an event that may take place as early as spring of next year, according to The Wall Street Journal. The lack of financial information from Facebook has led to great speculation about the company's value. However, people with insights into the company's recent finances said they thought Facebook was growing at a pace that justifies a valuation of $100 billion or more when it goes public, according to The Wall Street Journal.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags social mediainternetbusiness issuesFacebooksocial networkingfinancial resultsInternet-based applications and services

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Mikael Ricknäs

IDG News Service
Show Comments

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill


I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?