You Don't Need 300 Million Users To Make Money (... But It Helps!)

First of all, congratulations to young Mr. Zuckerberg and the rest of the team at Facebook. According to his blog post yesterday, the site now has over 300 million users. This is a remarkable feat by any standard and places Facebook firmly in the pantheon of internet gods. Given that the announcement about reaching 250 million users only came in July, we can see that Facebook continues to experience remarkable growth as it becomes an essential part of many people’s lives.

Perhaps even more importantly for Mr. Zuckerberg, he was able to announce that Facebook had finally become “cashflow positive”. An interesting choice of words that is open to interpretation as Alan Patrick of Broadsight amusingly points out on his blog. At least one thing is clear and that is whatever interpretation of “cashflow positive” Facebook uses for this past quarter, it is not likely to have made much of dent in the $700 million that has already been invested in the site.

So, if it takes one of the world’s most popular sites five years, 300 million users and $700 million of investment to make money, what hope is there for the rest of us? Plenty. And the reason is this. You don’t need 300 million users to make money. What you do need is a clear conversion strategy for the users or visitors you do have.

Facebook has built its user base with fantastic word of mouth and viral expansion through every demographic. The rest of us are using a combination of PPC, SEO and other SEM tactics to generate traffic to our properties. But even without a viral tsunami we can all still do more to optimize the value of the traffic we generate for our sites.

You may even find that your real online business is not an ad-supported behemoth like Facebook, but a lean and keen revenue-generating machine with a real product and an open and defined strategy for turning your visitors into purchasers or subscribers or downloaders. Facebook needed 300 million visitors in order to start making money. My bet is that you can achieve the same goal with far fewer.