• Bloomberg News, Wednesday, April 29, 2009 11 AM

Facebook "could not be doing better financially," COO Sheryl Sandberg asserts in an interview with Bloomberg News, and the social networking giant does not need to raise money, either. "We absolutely do not need to take money," she said. "We might take money -- but it doesn't mean we need to."

Facebook might not be reeling financially, but it is trying to expand amid the worst market for Internet advertising since the dot com bust, notes Bloomberg's Brian Womack. Sandberg admits that Facebook was "nervous" following the collapse of Lehman Brothers last year, but now she says the company is "on a path, a clear path, to be cash-flow positive next year." But there are still significant challenges for the world's largest social networking site. "It's a very, very tough and discriminating audience," says Gartner analyst Allen Weiner, adding that Facebook users aren't used to seeing many ads on the site. "I also don't think they've totally sold the vast array of potential advertisers and marketers on the value of Facebook."

Even so, clients are spending more on Facebook today than they did before the start of the financial crisis. Part of this comes down to an expansion of Facebook's advertising products. For example, the site is experimenting with targeting ads based on information on users' virtual walls, but without revealing any personal data.

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