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Facebook’s rapid growth in 2008 strengthened its potential to make money by giving it a much larger audience, a growing international footprint and an expanding network of outside developers. Those factors made the service more attractive to advertisers and partners, but the available 2008 announcements do not establish that growth had already produced a specific revenue gain that year.
What Facebook’s growth looked like in 2008
In July 2008, Facebook said it had more than 90 million active users. The company was also rolling out a redesigned site and changes to its platform and feeds. That combination mattered commercially: a larger audience created more potential reach, while product and distribution changes could make the service more useful and help content and applications circulate.
Facebook’s announcement described its platform as a way for outside developers to build applications that users could access through Facebook. It also highlighted Facebook Connect, which let people bring their Facebook identity and friends to participating sites and applications. These features offered ways to extend Facebook’s presence beyond its own pages, although the announcement did not measure their revenue effect.
How a larger audience could improve its money-making prospects
More potential advertising reach
A larger user base gave Facebook the possibility of showing ads to more people. Growth alone, however, does not determine advertising revenue: the number of ads delivered, their average price and the audience’s activity all matter. Facebook’s later financial filing described those factors as contributors to advertising results.
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A stronger reason for developers to build
In 2008, Facebook said its platform had more than 400,000 developers and entrepreneurs from 160 countries. A broad developer community could bring more applications and services to the platform, making it more useful to users and potentially creating additional opportunities for partnerships or transactions. The count is evidence of ecosystem scale, not a measure of revenue earned.
International reach with different revenue potential
In May 2009, Facebook said it had more than 200 million people on the service, with 70% outside the United States. That international reach increased the potential audience, but users in different regions did not necessarily generate the same revenue per person. Facebook later noted regional differences in revenue per user, so global user totals should not be read as equivalent to a uniform increase in earnings.
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What later financial results show—and what they do not
Facebook’s 2012 SEC filing reported revenue of $777 million in 2009, $1.974 billion in 2010 and $3.711 billion in 2011. These figures show substantial revenue growth after 2008; they are not 2008 results and cannot establish how much revenue the company earned in that year.
The filing said advertising was Facebook’s largest revenue component. In 2011, ads delivered increased 42% and average price per ad delivered rose 18%. Facebook said user growth was the primary driver of the increase in ads delivered. It also identified engagement, product changes, ad placements, mobile usage and ad pricing as relevant factors. The later filing therefore gives a plausible mechanism connecting audience growth to advertising revenue, but not proof that audience growth alone caused the overall increase.
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Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Repair Windows errors before they cause bigger problemsFix Now →The investment announcement was not proof of cause and effect
In May 2009, Facebook announced a $200 million investment by Digital Sky Technologies for a 1.96% equity stake, at a stated $10 billion valuation. The announcement came as Facebook reported more than 200 million people on the service. The transaction is a dated investment and valuation fact; it does not show that the 2008 user figure directly caused the valuation.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Growth also brought costs and limits
More users and engagement could increase Facebook’s advertising opportunities, but serving a larger, more active service also required spending. Facebook’s later filing noted that higher engagement involved additional expenses and capital investment. For that reason, audience growth is best understood as improving monetization potential—not as a guarantee that revenue or profit would rise in step with users.
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- Audience scale: more people could make Facebook more valuable to advertisers and developers.
- Engagement and ad delivery: activity could affect how many ads the company could deliver.
- Pricing and geography: ad prices and revenue per user differed, so user totals alone were incomplete.
- Costs: infrastructure and other spending meant growth did not automatically translate into profit.
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