Facebook nearing $1 billion revenue run rate, Zynga revenue triples

December 17, 2009

Everybody knows social media firms are growing like gangbusters. Facebook, for instance, recently surpassed 350 million users, 16 months after reaching 100 million users.

How much money the Web start-ups are making is less clear — though industry-watchers were treated to a few tantalizing revelations this week.

Facebook is within striking distance of a $1 billion annual revenue run rate, according to TBI Research analyst Rory Maher.

FB2That would be a dramatic increase from the $500 million in 2009 revenue that Facebook board member Mark Andreessen touted back in July.

In a report released Tuesday Wednesday, Maher, whose research firm is own by blog publisher The Business Insider, said Facebook’s revenue growth is coming as advertisers increasingly pour marketing dollars into social media web sites.

Facebook is able to charge a much higher CPM for custom campaigns on its site than rival social networks, Maher said in the report. And the company’s self-service advertising product is increasingly gaining favor as an alternative to the search ads offered by the likes of Google, he said.

The $1 billion run rate, which Maher said he arrived at based on conversations with executives that are “connected to” Facebook, means the company’s monthly revenue has now reached the level where it would total $1 billion if repeated on a 12 month basis.

“If the company continues on its current growth trajectory it should easily exceed $1 billion in revenue in 2010,” Maher wrote in the report.

Meanwhile, Zynga, the hot maker of games for social networks, raked in $180 million in new funding on Tuesday Wednesday.

In an interview with Reuters, Zynga CEO Mark Pincus acknowledged that the company’s revenue was growing at least as quickly as its headcount.

He wouldn’t say what the revenue was, but the company provided headcount figures.

Zynga began the year with 156 full-time employees (or 206 employees including contractors). The company now has 561 full-time employees (or 712 employees including contractors).

So headcount has grown an additional 246 percent to 260 percent this year (depending on whether or not you include contractors) and, consequently, revenue has grown by at least that much.

Or, you could just take the word of a source familiar with Zynga, who said the company’s annualized revenue run rate is now more than $300 million.

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