Facebook could make money. They've just opted to focus on other things...probably to the detriment of their long-term health as a company. But, they've decided that the network effects of having the most users is the most important thing for them, and they've put aside all other considerations. I don't for a second think Facebook is worth $15 billion (but maybe the ~$4 billion internal valuation that people within the company are getting for their shares when they sell privately).
But, Facebook is having to try pretty hard to outspend their incoming cash. They've hired very aggressively and made decisions that are more befitting a much larger/older company. I don't know enough to say if it'll all come crashing down...but it'd be possible to make Facebook make money tomorrow, if they laid off some of those hires and got as smart as Google about infrastructure.
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Facebook could make money. They've just opted to focus on other things...probably to the detriment of their long-term health as a company. But, they've decided that the network effects of having the most users is the most important thing for them, and they've put aside all other considerations. I don't for a second think Facebook is worth $15 billion (but maybe the ~$4 billion internal valuation that people within the company are getting for their shares when they sell privately).
But, Facebook is having to try pretty hard to outspend their incoming cash. They've hired very aggressively and made decisions that are more befitting a much larger/older company. I don't know enough to say if it'll all come crashing down...but it'd be possible to make Facebook make money tomorrow, if they laid off some of those hires and got as smart as Google about infrastructure.