I'm pulling these numbers out of thin air, but consider it plausible.
Let's say 2200 employees with an average expense of 100K/year (salary and benefits) = 200 million dollars right there in costs. Factor in property (building, furniture etc) and other standard business operation costs.
Then when you get to the engineering side of the house - the data centers, servers, bandwidth, etc.
It is easily plausible for facebook to be un-profitable.
You'd have to 10X those costs (to $500M/yr), plus assume a 250% overhead (another $500M) on top of your $200M salary and benefits figure for Facebook to be in the red.
Calling that plausible would seem a bit of a stretch.
Did you actually read that article? That is lease cost for their data centers (in 2009 no less). That's basically just paying the rent on their data centers.
That doesn't include a 200 million dollar data center project to be built in Pineville, OR. And that does not include infrastructure, bandwidth, software, hardware maintenance etc.
Let's face it, Facebook does not sell a product. Their only current viable revenue model is through advertising.
> That doesn't include a 200 million dollar data center project to be built in Pineville, OR.
Which will, in the long run, be dramatically cheaper than leasing space - which has all the same costs, plus a middleman to pay, minus the efficiencies of an entirely custom setup.
According to Glassdoor.com, the mean software engineer salary at FB is $110k. A year and a half ago, Facebook has around 900 engineers. If you consider that an employee's billing rate is generally half-again as much as salary, on engineering alone they could be laying down $150 million. Depending on how a lot of other numbers go, yeah, I agree that their income could be small with regard to their revenue.
They have 1700 employees. How much money is spent per employee (salary + other costs, like food, equipment, etc.)? Let's assume $150,000 (I think I saw this figure used elsewhere for this purpose, no idea if it's at all accurate.)
In that case, $255,000,000 goes on employees. That's already a nice chunk. Add to that any advertising costs, add to that server costs (I assume that for Facebook, these are quite high considering the huge amount of traffic they get), etc. That'll already be way up there.
Also, they buy some smaller companies for large chunks as well. Not sure if we can include that or not.
In other words, it's possible they're not profitable. No idea whether they are or not, but it is possible.
