Eventually, someone has to pay something for a service - it sounds like FaceBook is just starting to figure that out:
The owners of Facebook, the fast growing social network, were forced to sell a significant share in the company because they did not have enough computers to cope with the site's rapidly increasing number of users, Times Online has learnt.
Facebook's founders, who have always resisted a buyout, were forced to dilute their stock by as much as 10 per cent a year ago when it became apparent that they had not bought enough hardware to accommodate the growing subscriber base, a well-placed Silicon Valley source said.
It's not a huge surprise that people are flocking to a free service, especially after FaceBook opened things up for third party applications. The downside is simple: someone has to pay all the real costs for the physical infrastructure. You can bet that those investors are going to want an actual return on their investment, too - which points to one of a handful of possibilities, as I see it:
- Increased use of ads, assuming that ad revenue can float things
- Pressure to sell FaceBook to a large entity
- Pressure to start charging some kind of subscription fee for use, for premium use, for something
- Pressure to go public (although: Sarbanes-Oxley makes that a whole lot less friendly than it would have been a few years ago)
Something has to give though - no one invests money out of the goodness of their hearts. I suspect that Zuckerman is wishing that he'd taken Yahoo's offer right about now.