Facebook announced that it had crossed 300 million users and more importantly, had also turned cash flow positive. Mark Zuckenburg was quite happy with this, as the goal had been to achieve a positive free cash flow  some time in 2010. There have been speculation always about an IPO and its timing -  Facebook has put it to rest that the IPO will not happen in 2009, though there are skeptics.  Tracking Facebook’s valuation has become quite a sport with the VCs.

Facebook stated that it was on track to earning over $500 million this year. This has important ramifications. Facebook added about 50 million users in just under 3 months.  It continues to grow faster than the search engines and is narrowing the gap in visitor numbers.  User interest in facebook has surged past myspace and continues to grow. While  Facebook is continuously spending money in adding capacity, hiring new talent and investing in better technology, it is also more successful in generating ad revenues for the large volumes it attracts.

All this has the makings of a dream internet IPO. There are a few “look before leaping” points -

- How efficient is Facebook in generating its dollars? How many user page views does it take to generate $1?

- How great is Facebook from an advertisers point of view? Are both large and small advertisers as happy with Facebook as they are with Google?

- How well do ads perform on Facebook? (My personal experience has not been that great. Facebook click reporting has always over-reported on clicks in each trial)

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