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Facebook Hits 1 Billion Users: Now The Hard Part

5 Facebook Rivals Hot On Its Heels
5 Facebook Rivals Hot On Its Heels

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Facebook CEO Mark Zuckerberg said Thursday that the social network has reached 1 billion monthly active users, and expressed gratitude toward the website's users.

"Chairs, doorbells, airplanes, bridges, games," said Zuckerberg as a prelude to a brand promotion video produced to celebrate the occasion. "These are all things that connect us. And now Facebook is a part of this tradition of things that connect us too."

The company also released a more detailed set of usage statistics, a move that appears to be designed to restore confidence in the company's business model and buoy the company's flagging stock, which presently trades at about half its IPO price of $43.

Without doubt, a billion users represents a significant milestone, assuming the number doesn't include the roughly 83 million duplicate and fake Facebook accounts that the company has acknowledged. One billion represents about 14% of the world's 7 billion people and 18% of the roughly 5.5 billion people around the world who are age 13 or over.

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Facebook limits access to those 13 or over, though more than a third of parents in a recent Microsoft survey said their children had joined Facebook before turning 13.

The social network went from 50 million users in October 2007 to 100 million users in August 2008, according to the company. By July 2010, it hit 500 million users, with the 1 billion mark officially recorded on September 14, 2012, at 12:45 p.m. Pacific, to be precise.

It seems unlikely that Facebook will be able to sustain its rate of growth, which may be one reason that the company has been developing technology to allow children under 13 to use the site under parental supervision. The company is also lobbying against proposed changes in the Children's Online Privacy Protection Act (COPPA) that might prevent it from offering Like buttons to third-party websites, where children's data might get captured. Too much privacy, evidently, is bad for business.

Why so much concern about the young? They appear to be more interested in Facebook than their elders and the median age of Facebook users keeps declining. In 2007, the median age of Facebook users was 26. By July 2010, it was 23. Today, it's 22.

If Facebook's revenue per user kept pace with the social network's user growth, the company might face less skepticism from investors. But in July, its average revenue per user hit $1.28, an increase of less than 2% from Q2 2011, according to Inside Facebook.

With potential new users coming from the ranks of the young, not the most affluent demographic, and from outside the U.S. during a challenging global economy, Facebook will have to work hard to find ways to increase its revenue.

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