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CNBC is reporting that Facebook CFO, Gideon Yu, is out. Facebook is instead seeking a replacement with “public company experience.”
Insiders said that Mr. Yu’s departure had more to do with disagreements with Facebook founder, Mark Zukerberg, over valuation, funding and revenue generation.
Meanwhile, a source very familiar with the company said that Facebook needs about $100 million quickly (BusinessWeek confirms this) to stay afloat of which, $70 million is due immediately to pay for bandwidth, server and other operational costs. The same source tipped us last time about an impending cash crunch at Facebook.
I was also told that Facebook is prepared to go public (IPO) if no funds are secured shortly. Apparently, Facebook has already taken many of the necessary steps to go public according to one source. Incidentally, Mr. Yu just returned from a long trip to the middle east and Asia to raise money for Facebook.
Facebook has 200 million users but it is still not profitable. If it goes public there will be severe pressure to produce revenue because the growth story will not stick for long with investors. I mean at 200 million users and you can’t make money! How many users do you need 500 million or 1 billion? What is the cost of getting there?
In contrast, MySpace was bought by Fox for $586 million with 25 million users and has generated in excess of a $1 billon. Facebook has taken in over $500 million and there is no light at the end of the tunnel. What is your take? Do you have $100 million to spare?
Channels: cfo, Facebook, MySpace
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This is what i think:
http://www.sramanamitra.com/2008/02/05/deal-radar-2008-facebook-woes-coming/
Comment by Sramana Mitra — April 1, 2009 @ 7:28 PM
Anyone looking to raise money at this time will learn that you are not going to get what you thought. Down is the new up. It does not matter if you in the throes of bankruptcy like GM, a profitable company like Spansion ($3 bil memory company that went bankrupt for lack of credit) or even a highflier like Facebook.
A number of articles are suggesting that they are looking at debt financing opportunities. This is not the time to burn cash or take equity. Even Middle Eastern money has dried up.
Facebook needs to find a way to do what everyone has to do – live within its means, then go public.
They make a fantastic product. Now they need to run it like a business.
Comment by Rajiv — April 1, 2009 @ 9:05 PM
So the question is: who has been Zuckered? Microsoft or Facebook
If MS can cram down on a new round at a low valuation, Mark will be the real Zucker!
Comment by posterior rump — April 1, 2009 @ 9:09 PM
I have access to the needed funding for facebook. AWho should I talk to?
Comment by paul M — April 22, 2009 @ 8:15 AM