Is Facebook already more profitable than Amazon?

Is Facebook already more profitable than Amazon?

Summary: Facebook's financial details may not be public, but estimates show it could already be more profitable than Amazon. Revenue is a different story.

SHARE:

How profitable is Facebook? Since the young company is still private, nobody knows for sure. Still, estimates indicate the social networking giant could already be pulling in more profits than the online retail giant Amazon. If it isn't already, it will be by the end of the year, at least according to unofficial numbers.

Facebook's revenue passed $1.6 billion in the first half of 2011 and saw around $800 million in operating income (although net income was reportedly just under $500 million). Uncrunched points to Amazon's financials for the same time period: $322 million operating income in Q1 and $191 million operating income in Q2, or $513 million for the first half of 2011.

Palo Alto's revenue and profit is rising at an estimated 50 percent clip every six months. In other words, $2 billion in operating income for 2011 is entirely possible.

It's important to remember that revenue and profit are two completely different beasts. While Facebook may be passing Amazon in profit, it's nowhere near when it comes to revenue. Amazon saw a total of $34 billion in revenue for 2010. Facebook's revenue for last year is estimated to anywhere from less than $1 billion up to nearly $2 billion.

Amazon's market cap is $107 billion. Facebook has accepted investments at a valuation of at least $50 billion. The latest valuation from third-party investors was $70 billion, while the highest valuation private markets have given the social network has been $80 billion.

Cue the speculation on whether Facebook is undervalued or overvalued, and remember that Amazon probably deserves the same type of scrutiny.

See also:

Topics: Social Enterprise, Amazon, Banking, Enterprise Software

Emil Protalinski

About Emil Protalinski

Emil is a freelance journalist writing for CNET and ZDNet. Over the years,
he has covered the tech industry for multiple publications, including Ars
Technica, Neowin, and TechSpot.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

7 comments
Log in or register to join the discussion
  • RE: Is Facebook already more profitable than Amazon?

    Tell me how an online shopping mall should be under the same scrutiny as a company whose advertising model needs a ton of work. I am very curious to hear this one.
    hoaxoner
  • Can't compare a durable goods company against a service

    company, where the service company's revenue could disappear overnight with just one wrong move, like what happened to MySpace.

    Nope, sorry! Can't scrutinize different companies the same way.

    Amazon is an online store, and it offers real products and real services. Facebook is one simple kind of service, and people can leave that service without missing it. What Amazon offers is quite different, and while people don't have to shop online, there are still bargains to be had and sellers who would miss the service if Amazon were to disappear. The same can't be said for Facebook.
    adornoe
    • RE: Is Facebook already more profitable than Amazon?

      @adornoe@...
      I agree with you 100%, they aren't in the same category and Facebook could be (and probably will be), gone within a few short years. Amazon didn't even make a profit for the first few years of its existence, but was still a highly valued commodity even so.

      Facebook appeals to the tweens and teens and their parents that want to monitor them. It brings back memories of pop stars of the past (anyone remember Lief Garrett or any of that ilk?), here today gone tomorrow when the next "something-new" comes along.
      BrewmanNH
  • RE: Is Facebook already more profitable than Amazon?

    I spit on facebook ... ptooo! I do have real friends. And Amazon is great even if only for the wealth of information on prices and products as well as the buyers and fans comments.
    strangefruit
  • RE: Is Facebook already more profitable than Amazon?

    I don't understand, how does/can facebook make money? they don't charge for anything....
    aiellenon
  • Facebook has an Achilles Heel

    The problem with Facebook is this: One great piece of software, or one paradigm shift in technology would turn Facebook into Myspace - obsolete in a year or so. Amazon - even Wal Mart can't take them out. How do you take undercut their prices, or make their business obsolete? Answer that and you've just made yourself a few billion.
    nick777
  • RE: Is Facebook already more profitable than Amazon?

    Remember, MySpace wasn't Facebook, it never got that big. Just because one social network collapsed, doesn't mean Facebook would.

    Facebook is the one that alone took out the likes of Myspace, Orkut, Buzz, Google Connect and gave rise to Google+.
    If there was no Facebook, you wouldn't have had the story of the collapse of these social networks.

    800+ Million Active users, Billions in Revenues, millions of apps, millions of pages, trillions of interactions. These numbers are unprecedented, so you cannot predict the future from any examples from the past.

    Facebook is the number 1 website on the internet. No one could even challenge Google's dominance for about a decade, but now, Facebook is the king and it is here to stay (and you know it!)
    Devdd