The social-networking location is moving aggressively to sign up more users in a circle the world while much of Silicon Valley hunkers down

By Spencer E. Ante

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As gloom descends on Silicon Valley, most startups and giants are growing cautious and cutting back. But not Facebook. The social-networking Web site sees a bleak economy as totally the more reason to press ahead with aggressive plans with a view to growth. “This is not the time for tech companies to be cutting in a backward direction. \; this is the time to be hitting the accelerator,” says Peter Thiel, a Facebook victuals clause and investor.

Facebook executives think they can use the relating to housekeeping downturn to gain ground adhering the competition. So they’re going to difficult lengths to keep user growth on track in these rough spells. The company is gearing up for more acquisitions, hiring rapidly, and rolling out new advertising programs. Rather than shear the site’s development costs, Facebook has engineers cooking up versions in languages like as Xhosa, Tagalog, and French Canadian to go in the pattern of niche audiences around the world. “We’re in this game not just in favor of five or 10 years,” says Sheryl Sandberg, Facebook’s chief operating official. “We’re in it for 20 to 30 years.”

To fuel growth, the company asked the Securities & Exchange Commission earlier this year by reason of an unusual exemption. Typically, private companies that go beyond 500 shareholders fust start disclosing their fiscal results publicly. (This is the law that helped push Google to go public in 2004.) Facebook is approaching that beginning, so the firm asked the SEC for a waiver that will allow it to keep hiring and handing out restricted stock without public disclosure. The SEC granted the request on Oct. 14. That be disposed help the company reach 800 employees by the close of the year, up from 400 at the cathedral of 2007.

The company is even reducing its revenue goals to pull in other thing users. In January, founder and CEO Mark Zuckerberg said Facebook was shooting for revenues of $300 million to $350 million this year. But this spring, Zuckerberg and his board lowered the revenue target to $250 million to $300 million, say sources familiar with company fiscal resources. Thiel says engineers were shifted away from ad programs to concentrate on fresh features, languages, and other projects that will boost user growth. Even as the economy has weakened in recent months, Facebook has decided to stick with its spend-now, profit-later approach. “We still think it’s a land grab where we have to try to get to scale first,” says Thiel.

It’sitting a gutsy strategy, increasingly rare in Silicon Valley. Last month, prominent venture firm Sequoia Capital gave a presentation to its startups titled “R.I.P. Good Times,” that argued that companies must cut costs fast to survive. One Power Point slide included a skull-and-crossbones and the dispute “death spiral” to show the in a fair way fate of startups that fail to come to grips with the new being. The Sequoia explore has become accepted wisdom among Valley venture capitalists, leading to layoffs at scores of companies.

Facebook isn’t yet productive. But Thiel says the company can afford to be assailant. It has raised about $500 million and is “slightly cash-flow negative,” Thiel says. At its current scorch rate, he says, the company has enough money for three or four years. “If we stopped enlarging, we could make money, but it makes none faculty of perception for us to pause growing,” he says.

Facebook’sitting strategy stands in contrast to that of rival MySpace (NWS). Part of Rupert Murdoch’s publicly traded News Corp. (NWS), MySpace has dialed back on growth to converging-point on profits. Over the past year the site has expanded modestly, to 118 very great number users, while Facebook has besides than doubled in size, to 161 very great number users, according to research firm comScore (SCOR).