How exactaly is Facebook making money ?

Facebook proudly says it's ( Lear Make Money From Facebook ) bringing in enough cash to cover most of its day to day business costs. But how? The answer lies in self-serve advertising and virtual goods.The news that Facebook has tripled in size in the past year has grabbed headlines, but the real news was that the social network is now - in Mark Zuckerberg's words - "free cash flow positive". That piece of accounting jargon indicates that, after more than five years, the site has taken the first major step towards becoming an honest-to-god profit-making company and (perhaps) indicates that a stock market launch could finally become a possibility.

If all that extra money isn't being used to shore up vital day-to-day Facebook operations, that's probably good news - but whatever the case, the site hasn't hit the high notes quite yet.But the news that the site has money coming in needs to be examined a little closer. While it's a little difficult to discern exactly what this "free cash flow" constitutes for a private company like Facebook, one spokesman told Reuters that it "does not include any cash from private investment".

However, the fact that Facebookis making any money at all might come as a surprise to some, given that man ( Easy Ways Make Money with Facebook ) y are sceptical that social networking sites have real money-making potential (and for good reason, given the history of the dotcom bubbles and here-today, gone-tomorrow social websites).If all that extra money isn't being used to shore up vital day-to-day Facebook operations, that's probably good news - but whatever the case, the site hasn't hit the high notes quite yet.

After all, at the height of its powers a couple of years ago, rival MySpace was boasting that it was making almost $1m a day simply from selling adverts on its homepage. Since then, it has struggled to keep up momentum and found itself needing to slash jobs and refocus its business.For now, Zuckerberg and friends appear to be doing a lot of things right - but there are still plenty of lessons they need to keep in mind.

That might indicate that Facebook is now making more than enough money to cover its taxes, capital expenditure and the cost of around 700 staff - but that the money put into the company by its backers (such as the $300m recently raised from Russian group Digital Sky Technologies) doesn't count.