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Facebook financials were leaked last year during the Yahoo negotiations. You can still find them on Techcrunch. In fact, for 2007 FB expects to sell LESS inventory. Projections showed a plan to cut their remnant and self-service (flyers) from a 89% sell rate in ‘06 down to 45% in ‘07. Why? By artificially restricting supply, they hope to raise effective CPMs. It’s all there, just look for yourself.

If you think these “gifts” will generate “significant” revenue, you’re dreaming! Let’s say 20% of their users buy a few gifts per year each. Your talking about pocket change in their revenue projections for 2007 ($172M). IMO opinion they might sell some of these to their HS users and college freshmen but most others will probably think giving a friend a virtual icon for $1 is “dorky”. Why not just buy them a $1 longneck?

Lay off the Koolaid John ;) FB is a great company, just floundering when it comes to revenue generation from the great user base they’ve got. $1 puppy icons are not the answer.

If you care to look at the leaked document by Yahoo on the Facebook deal you can see what their unsold inventory is and their average CPM. Just takes a little reading, and some intuition.

Beyond that, though, I think Tim’s missing something that these ‘kids’ aren’t–they realize how much of a hit this product could be, if done well, with the other “kids” that use the site. As the above article mentions, similar products have been quite successful elsewhere–but never executed as finely as facebook does its products. My personal opinion is that at $1 a pop and carrying virtually no variable costs, these “gifts” are going to create substantial revenue for the company if they gain even minor traction in facebook’s quickly growing user base.

Just because Facebook is for “kids”, doesn’t mean it should be run by them.

are they treading water?

Screenshot at (link) gifts001.png