Lisa Hoover

Facebook needs more than money

By Lisa Hoover
April 01, 2009 2:50 PM EDT

On the heels of a recent New York Times report that Facebook expects to register its 200 millionth member anytime now comes news that the company is also trying to drum up money to help manage its explosive growth. Frankly, wads of cash isn't all Facebook needs.

BusinessWeek reports that Facebook is shopping around for new credit lines intended to help finance improved infrastructure. One thing the company apparently needs is better a way to manage its massive photo storage needs. According to the article, Facebook is now the largest photo-sharing site on the planet and is struggling under the weight of more than 10 billion images that have been uploaded by users. Facebook needs a place to put all those photos and, as a result, its storage technology needs are skyrocketing.

The company is looking for about $100 million in debt financing so it can beef up its backend, but its unlikely that means Facebook is running out of cash, as some speculate. These areĀ  simply growing pains for a company that's already five years old (that's 104 in Internet years). Now Facebook is being chased by the next hot young thing, and executives need to shore up the company's foundation if they want to stay competitive.

Facebook CEO Mark Zuckerberg defined social networking before there even was such a thing when he launched the blazing-hot company in 2004. It's doubtful he could have predicted its success so it's no surprise Facebook is scrambling for ways to keep up with user demand.

Despite the current state of the economy, it's unlikely the company will have too much trouble finding the credit lines it needs but Technologizer's Ed Oswald says Zuckerberg needs to get his management issues straightened out if they want to look good to investors. I agree, but I also think that before Zuckerberg signs on the bank's dotted line he ought to have a better plan in place for dealing with future changes on the customer-facing side of things than he has in the past.

Facebook is quickly becoming notorious for trotting out new features or policies, only to have to rein them back in when users start screaming. Take Beacon, for example. It was an ill-conceived idea intended to allow Facebook advertisers to publish information about the Internet surfing habits of Facebook users. Naturally, flocks of users came unhinged at what many perceived as an invasion of privacy and the company ultimately pulled the plug on the idea.

Facebook users were also whipped into a frenzy when the company changed its Terms of Service to imply that all user content -- including photos -- would become the property of Facebook in perpetuity. It only took the organized effort of 130,00 registered users for Facebook to backtrack on that idea.

Last month, it took no time at all for Facebook users to protest the site's new redesign. Calling it everything from a Twitter-clone to a unreasonably cluttered mess, complaints were long and loud. Within days, Facebook promised "improvements immediately and over the next several weeks."

If cash is king, a good user experience is its castle. All the money or expensive storage and hardware in the world won't amount to anything if Facebook doesn't stop annoying its user base every time the company comes up with a new idea.

If they don't devise a better approach than, "Whoops, we didn't mean to do that," Facebook fans will jump ship in favor of a more predictable and less schizophrenic method of social networking. Heaven knows there are plenty to choose from.