4/23/24, 10:04 AM
`
`Facebook Completes Rollout Of Haystack To Stem Losses From Massive Photo Uploads | TechCrunch
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`Facebook CompletesRollout
`Of Haystack To Stem Losses
`From Massive Photo Uploads
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`Startup Battlefield
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`Michael Arrington @arrington2lang=en / 3:16 AMCDT=April 6, 2009 [[] comment
`
`
`
`One nuggetof information Facebookleaked out to press last week
`
`during the Gideon Yu fiasco: the company has been EBITDAprofitable
`
`for five quarters, but doesn’t expect to generate positive cash flow until
`
`2010. Why the discrepancy? There’s only one answerto that —
`
`Facebook is paying out big dollars for something that must be
`
`depreciated overtime. If they could just write off the expensein full as
`
`they paid it they’d be having much bigger losses now that matched
`
`cashflow, and they’d hit profitability sooner. But accounting ruleslet
`
`them pay cash now and recognize the expenselater on. In early
`
`leaked projected financials, there was a $200 million difference in 2008
`
`cash flow and EBITDAprofitability (or lack thereof).
`
`What have they been buying? Stuff to serve up all these massive page
`
`views, and photosin particular. In our post last October, when
`
`Facebook wasfishing for dollars in Dubai, we noted someoftheir
`
`expenses,including a massive ongoing outlay for NetApp storage
`
`systemsthat cost $2 million each:
`
`The companyis likely spending well over a $1 million per month
`
`on electricity alone, say experts we’ve spoken with. Bandwidthis
`
`likely another $500,000 or more per month ontop of that. The
`
`company has earmarked $100 million to buy 50,000 serversthis
`
`year and next. And sources say they’ve been buying one NetApp
`
`3070 storage system per week just to keep up with all this user
`
`generated content. At up to $2 million each, that adds up quickly
`
`— we've heard estimates that they may have spent as much as
`
`$30 million this year alone with the company. And the icing on the
`
`cake — earmark another $15 million per year in office and
`
`datacenter rent payments.
`
`
`
`https://techcrunch.com/2009/04/06/facebook-completes-rollout-of-haystack-to-stem-losses-from-massive-photo-uploads/
`
`1/8
`
`APPLE-1014
`
`1
`
`APPLE-1014
`
`
`
`Facebook Completes Rollout Of Haystack To Stem Losses From Massive Photo Uploads | TechCrunch
`
`Login
`
`Search Q
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`Startups
`Venture
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`Security
`Al
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`Crypto
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`Events
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`Facebook CompletesRollout
`Of Haystack To Stem Losses
`From Massive Photo Uploads
`
`Startup Battlefield
`
`More
`
`Michael Arrington @arrington2lang=en / 3:16 AMCDT=April 6, 2009 [[] comment
`
`
`
`One nuggetof information Facebookleaked out to press last week
`
`during the Gideon Yu fiasco: the company has been EBITDAprofitable
`
`for five quarters, but doesn’t expect to generate positive cash flow until
`
`2010. Why the discrepancy? There’s only one answerto that —
`
`Facebook is paying out big dollars for something that must be
`
`depreciated overtime. If they could just write off the expensein full as
`
`they paid it they’d be having much bigger losses now that matched
`
`cashflow, and they’d hit profitability sooner. But accounting ruleslet
`
`them pay cash now and recognize the expenselater on. In early
`
`leaked projected financials, there was a $200 million difference in 2008
`
`cash flow and EBITDAprofitability (or lack thereof).
`
`What have they been buying? Stuff to serve up all these massive page
`
`views, and photosin particular. In our post last October, when
`
`Facebook wasfishing for dollars in Dubai, we noted someoftheir
`
`expenses,including a massive ongoing outlay for NetApp storage
`
`systemsthat cost $2 million each:
`
`The companyis likely spending well over a $1 million per month
`
`on electricity alone, say experts we’ve spoken with. Bandwidthis
`
`likely another $500,000 or more per month ontop of that. The
`
`company has earmarked $100 million to buy 50,000 serversthis
`
`year and next. And sources say they’ve been buying one NetApp
`
`3070 storage system per week just to keep up with all this user
`
`generated content. At up to $2 million each, that adds up quickly
`
`— we've heard estimates that they may have spent as much as
`
`$30 million this year alone with the company. And the icing on the
`
`cake — earmark another $15 million per year in office and
`
`datacenter rent payments.
`
`
`
`https://techcrunch.com/2009/04/06/facebook-completes-rollout-of-haystack-to-stem-losses-from-massive-photo-uploads/
`
`1/8
`
`APPLE-1014
`
`1
`
`APPLE-1014
`
`
`
`4/23/24, 10:04 AM
`
`Facebook Completes Rollout Of Haystack To Stem Losses From Massive Photo Uploads | TechCrunch
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`Login
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`As wenoted in February, Facebookis the largest photo application on
`
`the web(forgetting everything else they do). More than 850 million
`
`photos uploaded to the site each month, and these things chew up
`
`bandwidth and storagelike crazy. And it’s even more expensive to
`serve photosin poorer countries where Facebookis getting
`all its
`P
`P
`genng
`growth (and little revenue).
`
`Enter Haystack
`
`Haystack is Facebook’s way of substantially lowering the cost of
`
`storing and serving photos, and the rollout of the new internal
`infrastructure was recently completed. See Niall Kennedy for a
`technical overview of what Haystack is and whyit’s so much more
`efficient than third party solutions they’ve used to date, as well as this
`2008 presentation by Jason Sobel.
`
`Whatisn’t clear is if Haystack will really help Facebook control costs
`outside of the U.S., particularly in Asia. Butit’s a step in the right
`
`direction for cost control, and is certainly being factored in Facebook’s
`
`estimates of cash flow profitability by next year.
`
`CrunchBaseInformation
`
`
`Information provided by CrunchBase
`
`More TechCrunch
`
`
`
`https://techcrunch.com/2009/04/06/facebook-completes-rollout-of-haystack-to-stem-losses-from-massive-photo-uploads/
`
`2/8
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`4/23/24, 10:04 AM
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`Facebook Completes Rollout Of Haystack To Stem Losses From Massive Photo Uploads | TechCrunch Login
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`https://techcrunch.com/2009/04/06/facebook-completes-rollout-of-haystack-to-stem-losses-from-massive-photo-uploads/
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`Facebook Completes Rollout Of Haystack To Stem Losses From Massive Photo Uploads | TechCrunch
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