Those portals are built upon an active user base and thus heavily depend on it. That user base is the reason for the majority of revenues and later investments of companies behind them. Goldman Sachs for example spent much on Facebook with its recent $450 million investment. Reuters Group Ltd. a global news agency went public in early 2011 with some numbers regarding Facebook. Therefore the company earned $355 million in net income in the first nine months of 2010 (Facebook generated $1.2 billion in revenue during the same period of time), according to documents distributed by Goldman Sachs. Expanding this nine-month period to a year yields $1.6 billion in revenue and under half a billion in income. Interestingly that is just a fraction of the online social network's $50 billion valuation. Nevertheless investors are increasingly eager to buy shares of Facebook and other fast-growing Internet social networking companies on private exchanges.
 
Although given these raw numbers and the relatively moderate reduction in active users from 500 to 200 million we still think the Facebook hype will come to an end soon. An article on CNN named "Facebook hype will fade" by Douglas Rushkoff recently made such a statement. Mr. Rushkoff says: "[..] we are witnessing the beginning of the end of Facebook." and that the company is actually cashing out. He further compares Facebooks performance with AOL's in 2000 when the company came up with a $350 million merger with Time Warner which finally turned out to be catastrophe since users ventured out onto the Web directly not using the companies services. Mr. Rushkoff also says that Goldman cannot loose, either by its direct investment/earnings for selling that other $1.5 billion of private Facebook shares, or by ultimately making bets against Facebook. He finally states correctly, that it's the people that matter and not the venue, because the longer Facebook can maintain (an illusion of) great profits without alienating its users, the longer the company can delay its decline.
 
A thing not yet pointed at is the technology behind Facebook. The companies recent endeavors are insofar relevant as they may delay Facebook's decline by attracting new users. For instance Facebook lately introduced an alternative way to verify its users rather than using well-known CAPTCHAS. The new login scheme called "Social Authentication" will authenticate users by showing them pictures of "friends" registered with Facebook and then asks to name the person shown in a specific one. Furthermore Facebook launched HTTPS in the context of "HTTPS Everywhere", as TRON-DELTA.ORG already reported, a project last year initiated by the EFF (Electronic Frontier Foundation) and meanwhile anticipated among website operators to secure HTTP connections using TLS; especially those of online search, communication or payment services. Taking that development into account it may give Facebook some more time even when considering some weaknesses within TLS (Transport Layer Security) itself. However we at TRON-DELTA.ORG think TLS should be mandatory in public places like shops, airports, libraries or schools and that secure VPNs which use cryptographic tunneling protocols to provide confidentiality should be introduced soon also.
 
To our own surprise some news turned up right before we wanted to publish this article. Slashdot.org reported, that an unknown suspect broke into Mark Zuckerberg's Facebook account and posted a (bizarre) message calling upon the company to adopt a social cause. The message was something like "[..]Why not transform Facebook into a 'social business' the way Nobel Prize winner Muhammad Yunus described it?[..]". Don't get this wrong; the author of this article is not an economist but considering the problems Facebook has to deal with a change in strategy may be a thing to consider.