14 DAY TRIAL // While the current spotlight for entrepreneur Marc Andreessen is on his latest project, a $300 million venture fund he set up with long-time business partner Benjamin Horowitz, he is also a member of the very exclusive Facebook board of directors. So his word that the social network will bring in $500 million in 2009 and up to several billion five years from now is about as close to an official estimate as you can get.
"This calendar year they'll do over $500 million," Andreessen told Reuters, noting that "if they pushed the throttle forward on monetization they would be doing more than a billion this year." He was also optimistic about the future saying "there's every reason to expect in my view that the thing can be doing billions in revenue five years from now."
He notes, however, that the safer approach Facebook and Twitter are taking by not pushing too hard for revenue at this stage could prove wiser in the long term and that the main focus for this type of social networks should be on user retention and growth rather than monetizing. This seems to be the way the two hottest social networks at the moment are pursuing and it helps that both companies got some very generous investments that should keep them comfortable for the short and medium time frames. Andreessen also pointed out how MySpace's move to generate as much income as possible was crucial in its decline.
There are some differences between the two though; while Twitter isn't generating any revenue and has no clear business plan, although cofounder Biz Stone says it will start seeing some income as soon as later this year, Facebook is already making a decent amount of money from its advertising program. Facebook hasn't officially made public its revenue so far and Andreessen's estimates are the only ones coming from a source inside the company.