That's a piss poor analysis, to be frank.<p>First, let's be honest: Facebook's problem is that it spends more on each user than it receives. In other words, its current operating P&L sheet is negative. That cannot possibly be disputed, unless there is some magical fairy dust that generates ad-revenue many magnitudes greater than the norm.<p>It's really irrelevant whether you believe that it costs Facebook $100M a month to operate, as Arrington seems to, or whether you figure FB can get by on a $1M a month shoestring budget. The fact remains that, regardless the numbers of users, per capita there is negative revenue generated.<p>Arrington argues that increasing the number of users, while not solving the per capita loss, hastens the use of those capital reserves of $500M. On this point, he is exactly correct. It's basic math. The rest is just semantics.<p>They need to solve the problem that revenue on a per user basis is a negative number. Not only do they need to make that number positive, they need to bring it into the black far enough that they can pay back their $500M in borrowed money, and give some sort of return. They need to do this before any of their current (or future) sources of funding collapse. This is a very tough problem to solve. (BTW, google was in this position once)<p>My humble opinion is that they won't be able to do this anytime soon, and will most likely fail in the future. As much as they laugh at the ad-driven screenshot in the article, that's probably what FB will look like in due time.<p>I'm just going with the odds. Outside of Google, I don't know of any company that's been able to come up with the last minute Hail Mary business plan.