Facebook Constantly Receives Investing News Headlines

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Mark Zuckerberg had a great idea back in February of 2004 when he launched www.thefacebook.com. Originally, the website was restricted to Harvard students only but on September 26, 2006 it became available to anyone, anywhere. The name changed as well. No longer was it called The Facebook but instead it changed to Facebook.com. But there is more to this site than just being able to find friends and share stories. It is a moneymaking venture that has had its fair share of up and downs. Investing news is continuously being reported to the media as to where Facebook stands in the fiscal world.

One of the first investing news stories to hit the papers was when Peter Thiel, co-founder of PayPal, invested $500,000 in the fledgling company. His initial investment into Facebook led to business experts projecting that Facebook would be in the top 10 business acquisitions within years. That projection turned out to be false even though there were reports of Facebook in merger talks with other huge companies.

Facebook makes its money, which allows it to remain a free website, through the use of advertising services. Each time a person clicks on one of the banner ads and makes a purchase, the company receives a portion of the profits. But there is a problem with that. With revenue dependent upon you clicking a banner ad, it can begin to suffer if people do not buy through their advertising services. This is most likely why Facebook had a $3.63 million dollar net loss in 2005. It was spending more to host the website and provide services than it was bringing in.

Enter in the merger and acquisition talks with giants Yahoo, Google and other companies. These huge companies tried to enter into negotiations with Facebook and a bidding war was even started at one time. Zuckerberg issued a statement in 2007 that essentially said that Facebook would not be sold to someone else. Was this the right thing to do? If you compare Facebook's membership to MySpace's membership, then you are left with the impression that it is no where near as successful. MySpace has more than double the members and is still a growing entity.

So what will happen with Facebook when its daily advertising is eclipsed by its spending? No one is certain of anything yet but with the huge net loss it suffered in 2005 it still remains to be seen if Facebook will be able to continue to compete with MySpace. There might actually be a day in the future when it must charge membership fees. However, for now that is only a hypothesis set out by business experts. Facebook today is still free of charge and open to people everywhere.