Facebook, Twitter End Talks on $500M deal

Kara Swisher at AllThingsD reports top executives of Facebook and Twitter recently “ended several weeks of serious talks, in which Facebook was offering to acquire Twitter for $500 million of its stock.” There had been some chatter about a deal, but talks were apparently more serious than was widely known.

The Twitter team apparently decided $500 million wasn’t a rich enough price. Since the company has still not developed a clear plan for making money from its popular microblogging service.

There was also a cost issue for Facebook. If Twitter was offered to Facebook’s 120 million users, Facebook execs estimated that it might have to deal with huge SMS fees–up to $75 million annually.“Facebook has its own revenue-generating challenges,” said one person close to the company. “As much as Twitter would give them a lift in the status area, it was still a worry.”

Facebook: $1 Million A Month in Power Costs

We’ve been writing about rising data center power bills for several years now. But few companies are experiencing this issue more acutely than Facebook, which is reportedly spending “well over $1 million a month” on electricity. That figure comes via TechCrunch, which says spending on power and data center hardware has burned through most of the money Facebook has raised, prompting the company to return to the markets to seek more capital.

The problem, apparently, is the huge amount of user-generated content at Facebook (like those 10 billion photos users have uploaded). TechCrunch says this enormous volume of UGC has driven the company to buy a new NetApp 3070 storage system every week. The company says it has “more than 10,000 servers” but it’s been saying that since the spring and the number would likely be higher than that by now.  Facebook has also been expanding its data center footprint,  leasing substantial chunks of new space in Ashburn, Virginia and Santa Clara, California.

Facebook is clearly a hot property, and as such has been the focus of many rumors, a few of which have turned out to be true. But we have no problem believing that their  power bills are huge, and growing by the month.

Facebook Hosts 10 Billion Photos

I’m a sucker for huge numbers, and Facebook’s engineering team has shared a pretty interesting data point: Facebook users have now uploaded more than 10 billion photos. More than 300,000 images are served every second.

Facebook’s 10 billion images easily outdistances the largest photo-sharing sites. Photobucket hosts about 6.2 billion photos, while Flickr has 2 billion, according to CNet. 

So Facebook users upload a ton of photos. What’s the significance? Those photos have to live somewhere. Facebook now has more than 1 petabyte of photo storage, and at least 2 terabytes of photos are uploaded every day. That will drive demand for more servers and more data center space.

The Dell-Facebook Cloud Dissipates

Last week we picked up on a report of what appeared to be a significant pending announcement that Facebook and Dell are “working together on a project that will represent ‘the next generation of cloud computing,’” noting that although there’s “lots of hype around cloud projects, this is one to watch.”

Or not. Execs from Facebook and Salesforce made an appearance at a Dell media event in San Francisco Tuesday, but there were no new partnerships or services announced. Facebook VP of technical operations Jonathan Heiliger spoke about the company’s operations, and commended Dell for being a “thought leader in large-scale infrastructure” and the most aggressive of the major server vendors in offering stripped-down cloud servers. We had assumed that the chumminess between Dell and Facebook was bad news for Rackable (RACK), which counts Facebook as its fourth-largest customer. But Heiliger made it clear that his appearance didn’t signify that Facebook necessarily favored Dell, and made a point of acknowledging other server makers, including Rackable. 

Facebook, Dell to Team on Cloud Computing

CNet reports that Facebook and Dell are working together on a project that will represent “the next generation of cloud computing.” There’s lots of hype around cloud projects, but this is one to watch given the two companies.

Why bother noting this before it’s announced on Tuesday? Whatever the details may be, it’s hard to believe that it’s good news for Rackable (RACK) which counts Facebook as its fourth-largest customer after Microsoft, Yahoo and Amazon. Facebook recently borrowed $100 million to buy servers, and the cloud computing announcement suggests a bunch of that cash is headed to Dell.

The Backstory: Facebook’s Virginia Data Center

Facebook engineer Jason Sobel was with the company just a few weeks in April 2007 when he was asked to help open the company’s new data center in Ashburn, Virginia. In a post today on the Facebook Engineering Blog, Sobel provides some background on the rationales for the data center expansion:

The primary reason for building a new datacenter on the east coast was latency. It takes about 70 milliseconds to send a packet across the country on a high-speed link, and it can be much longer for an average internet user. By putting servers in Virginia we could reduce the time to send a page to users on the east coast and in Europe by a noticeable amount.

A shortage of space and power in the company’s primary data center in Silicon Valley was also a motivation, as was the need for more than one location for disaster recovery purposes. He says the facility in DuPont Fabros’ ACC4 data center now serves “a substantial portion of Facebook’s traffic,”

Sobel also describes the challenges in getting data from the Ashburn and Silicon Valley data centers to integrate properly. “The main scaling challenge with this architecture is pretty obvious: all write operations must happen in one location,” he writes. “Going forward we’re very excited to develop new technologies that will let us perform writes in any location.” Read more at Jason’s entry on the Facebook Engineering blog.

Facebook: Better Cloud Servers Needed

Jonathan Heiliger looks at the web server market and sees a major disconnect. “The number of servers going into data centers is growing at the fastest rate ever,” says Heiliger, the VP of technical Operations for Facebook. “But enterprise server deliveries are flat. You could argue that that major server vendors are not doing enough to meet the demands of their largest clients.”

When Heiliger talks about servers these days, server vendors are listening. Facebook recently arranged new financing to buy $100 million worth of servers through a “venture lending” deal with TriplePoint Capital. The $100 million will be used entirely for web servers. Facebook already has more than 10,000 servers supporting its fast-growing social networking platform.

That’s promising news for Rackable (RACK) which has specialized in servers for high-density data center deployments. Rackable already counts Facebook among its four largest customers, and this week it introduced a new line of Extreme Efficiency (XE) servers, offering twice the density for the same energy usage.

Facebook Borrows $100 Million to Buy Servers

Facebook has arranged new financing to buy $100 million worth of servers, according to Business Week, which says the social networking site struck a “venture lending” deal with TriplePoint Capital, a Menlo Park (Calif.)-based company that specializes in lending money to startups. The $100 million “will be used entirely for servers,” Facebook Chief Financial Officer Gideon Yu told BW.

It’s been clear that Facebook will be a major customer of server vendors since it leased an entire data center building in Santa Clara, California, positioning the company for significant additional growth. As we reported in February, the lease for 86,000 square feet of brand new raised-floor server space from Digital Realty Trust (DLR) puts some large dollar signs on the importance of social networks as users of data center space.

You can fit a lot of servers into an 86,000 square foot data center. We recently noted that Facebook now has at least 10,000 web servers, and $100 million will buy a boatload more. Who’s the likely beneficiary of that server spending?

Facebook Now Running 10,000 Web Servers

How big is Facebook’s Internet infrastructure? Facebook VP of Technology Jeff Rothschild provided some details in a panel at the recent MySQL user conference. Rothschild says Facebook is now running 10,000 servers, including 1,800 MySQL servers that are overseen by just two database administrators.

That server growth is one reason Facebook has expanded its infrastructure through major leases of new data center space from DuPont Fabros (DFT) in Ashburn, Virginia and Digital Realty Trust (DLR) in Santa Clara, Calif. That’s also why IBM is introducing new iDataPlex servers optimized for Web 2.0 and cloud computing apps later today at the Web 2.0 Conference. IBM has clearly taken note of the success of Rackable (RACK) in large server sales to Facebook, Amazon (AMZN), Microsoft and Yahoo.

MySpace Bests Facebook on Uptime

MySpace has had better uptime than Facebook thus far in 2008, as MySpace has been offline for just 25 minutes, compared to 1 hour and 35 minutes for Facebook. But Yahoo!360 and LiveJournal have them both beat, according to a rating of uptime on social networks that has just been published by Pingdom. The monitoring found at least one instance in which a sopcial network’s effort to transition to an application platform may be affecting performance:

Bebo’s downtime has increased significantly lately and has had by far the most downtime of the 14 social networks we monitored for this survey. More than 12 hours of downtime in less than two months is a lot, and it could possibly be caused by the new open application platform that Bebo launched in December, allowing third-party developers access to its platform, Facebook style. It could be putting more strain on Bebo’s systems than they anticipated.

LinkedIn, which is widely used among business professionals, has had 4 hours of downtime in 2008. How does your favorite network fare? Check out the results of Pingdom’s research.