While you Facebook users are busy updating statuses, sharing links, and photos, money is spinning at the back of the social network website and in the executive rooms. A Russian investment firm has offered to buy $200 million of preferred stock in Facebook at a $10 billion valuation.

Facebook CEO and founder Mark Zuckerberg. Photograph: Craig Ruttle/AP

How did Facebook came about?

Mark Zuckerberg launched Facebook from his Harvard dorm room on February 4, 2004. It started off as just a “Harvard-Thing,” until Zuckerberg then decided to spread Facebook to other schools and enlisted the help of roommate Dustin Moskovitz.

They first spread it to Stanford, Dartmouth, Columbia, Cornell and Yale, and then to other schools with social contacts with Harvard. By the beginning of the summer, Zuckerberg and Moskovitz had released Facebook at almost forty-five schools and hundreds of thousands of people were using it. Zuckerberg was a member of the Alpha Epsilon Pi fraternity while at Harvard.

- Wikipedia

Who’s creating such a huge value in Facebook?

You and I.

Please hands up if you meet the following criteria…

- Are you the one who’re all over Facebook while working in the office?
- Are you the one keeps updating on Facebook via your mobile device?
- Are you the one who says, “Let me check my facebook, I haven’t check for 2 hours already!”
- Are you the one who take quizzes and swear on the lameness of the quiz, but then still invite your friends to take it?
- Are you feeling uneasy for not logging onto Facebook for more than 1 day?
- Are you feeling the stress when Facebook takes forever to load? (With 10 million visitors/day, you would expect some bottleneck there)

Facebook addicts from all over the world are pumping millions of dollars worth of value into the company, with your pro-active participation and your ever-so-valuable personal information and preferences (remember Facebook is all about information formality and accuracy, not some funky Friendster profile with all those bling-bling and starry alphanumeric non-Unicode characters).

Advertisers would surely love to get their hands on more than 225 million unique users. The ads are pin-pointed to match your personal profile and statuses – Targeted ads at its best.

Their ads are actually somewhat intelligent. For example, as soon as I changed my status to “engaged” the ads were all about photographers, rings, wedding planners, and related stuff. When I traveled to Jamaica and used Facebook while there, the ads were all about resorts & vacation planning.

quote Natpatben, a Digg user

But will this merely be just a moment of short-lived hype?

I don’t think so. Facebook had just started over 5 years ago, and it really didn’t took off until the last couple of years. And look at how much they’ve grown. Over 250 million users worldwide and 300 million unique visits per month. With that mammoth amount of loyal users and profile database on your hand, it’s too big to fail.

As they’re working on a payment platform, it’s only going to get bigger and richer as they step into e-commerce and virtual economies.

When AIG and GM failed in the real world, the US government provided cash bailout, in the Internet world, Google and Microsoft is the government providing the bailout money. Like I said, it’s too big to fail. We’ve only just seen the tip of the success story that Facebook has to offer.

P/s: Friendster was close to becoming part of something big in 2003, with a proposed $30 million buyout offer from Google. But the management declined the offer and the rest was history. Following that, a collective investments were gathered from various firms which totaled in around less than $40million. I guess that should be the turning point of Friendster. With majority of users from the South East Asia, they won’t be get anywhere with it.

Fake profiles with pictures of hot chicks are the common sights in Friendster. Credibility becomes an issue. So, if you want real friends, go to Facebook.