Facebook could reach US$1 billion revenue, board member says

A board member of social networking giant Facebook has said the site will likely record US$500 million in revenue this year, and could record billions in revenue in the next five years.

Entrepreneur and Facebook board member Mark Andreessen, told Reuters that if the site worked harder on selling advertising, it could reach US$1 billion in revenue this year.

“This calendar year they’ll do over $500 million,” Andreessen said. “If they pushed the throttle forward on monetization they would be doing more than a billion this year.”

Andreessen, who founded the internet’s first company devoted to web-browsing, Netscape, also sits on eBay’s board. He said that while revenue per user is still small, it is still important to grow the site’s user base and market share than focus on making money too quickly.

“There’s every reason to expect in my view that the thing can be doing billions in revenue five years from now,” Andreessen said. While Facebook does not disclose revenue, it says it expects 70% growth this year.

Andreessen also said he regrets not investing in the social networking giant when he had the chance. Currently Facebook’s major investors include venture capitalist Peter Thiel, Accel Partners, Microsoft and Russian internet company Digital Sky Technologies.

“I probably could have if I had tried hard but I didn’t,” he said. Instead, Andreessen has invested in micro-blogging site Twitter, but still warns investors in Facebook should hold on to what they have.

“Generally speaking, people who are selling their stock in Facebook now are making a mistake,” Andreessen said.

He says while Twitter is making no money at the moment, it is more important for it to grow its user base and features in order to obtain market dominance.

Additionally, he says there needs to be a healthy balance between selling advertisements and growing a decent platform for the site. Andreessen points to News Corp’s MySpace, which was once the leader of social networking, but lost market share due to what he claims was an over-emphasis on advertisements opposed to growing the site.

“They have to take the market,” said Ben Horowitz, who is developing an investment fund with Andreessen. “There is no investor in Twitter who will tell you: ‘Boy, those guys are screwing up, there’s no revenue yet.'”