Business

Facebook's blackout cost: about $20,000 a minute, or the price of a few engineers

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Image Credit: Twitter user luca2d

Facebook experienced another global blackout earlier today, with some people experiencing access issues between 8 a.m. and 9 a.m. Pacific. While it’s difficult to know how many could not access Facebook over the course of the blackout, it’s still fascinating to calculate how much of an issue this is for the public company.

According to their most recent (Q2 2014) earnings report, “revenue from advertising was $2.68 billion” [PDF]. While a portion of its revenue comes from other sources, Facebook makes zero dollars from its largest revenue source when people can’t click ads promising them rippling six-pack abs with one weird trick.

This is a simple calculation: $2,680,000,000 divided by 3 months divided by 30 days, divided by 24 hours, divided by 60 minutes = roughly the ad revenue per minute, $20,700.

Now, this a drop in the bucket for their wealthy executive team. But what does the loss in revenue mean for Facebook itself? According to salary database, Glassdoor.com, Facebook pays between $85,000 to $753,000 for an engineer, with the average of $173,000.

So, if we assume an entire universe of users could not access the site for 10 minutes over the blackout period, that’s roughly $200,000, or about the cost of an engineer.

These are rough estimates: 8 a.m. on a Monday isn’t Facebook’s peak traffic hour. Nor does this factor in how many people just gave up checking Facebook for an extended period of time, the productivity loss at Facebook HQ itself, or a hit to the stock price.

But this is one of the fascinating downsides to an Internet company: all of its eggs are in one digital basket. Ford Motors doesn’t suffer a blackout. There is no point in time when no one can order a Starbucks coffee during its business hours. But when Facebook doesn’t work, the company starts burning money faster than most people will make it in their lifetimes.

Facebook is back up now, so feel free to share this article (wink).


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