Servicing Facebook

Facebook has taken on $100m of debt to buy 50,000 more servers (from TechCrunch)

This is where they get hoist by their own petard of huge amounts of to and fro transactions to do anything on Facebook - great for traffic count in the early days, but it also means scalability is impacted - its at a higher multiple of stuff to serve per user this way.

I don't think they are growing faster than was projected, so unless they were after more money than they got in the last round (c$350m) then clearly transaction per new user are higher than planned. And anyone who has built social network systems will know they scale much more geometrically compared to say a Google anyway, which is a much more linear transaction.

What is also interesting is that they have chosen to take debt, not equity this time round. One can weave all sorts of conjectures around this, right now I'll assume the new COO has worked out this is the cheapest form of funding that / and doesn't put that $15bn valuation under threat.