Facebook rides social networking wave

Another hot social networking startup, Facebook, recently announced it had been funded by Greylock Partners.

I'm surprised, and impressed, by the actual funding amount. Most Internet companies normally do not need tons of funding to expand -- since costs of hardware, broadband etc are in a perpetual downward trend. The only things that keeps rising in the Silicon Valley is the price of smart engineers.

Of course, the other side of the story is that Facebook is commanding an extremely high valuation and atleast a couple of VC's were in competition for the deal. The resulting auction might have played a large part in the funding amount.

Chances are Facebook will pump most of the money towards hiring people and adding cool features to it's site. They might advertise extensively to attract more users, to reach the all important critical mass so critical to explosive growth.


Cheers