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Facebook hits financial milestone

Facebook announced on Tuesday it was earning more money than it was spending and had signed up its 300 millionth member.

Facebook co-founder and chief executive Mark Zuckerberg said the fast-growing social network had become “cash flow positive” last quarter, meaning that it is now earning enough to cover operating costs.

“Earlier this year, we said we expected to be cash flow positive sometime in 2010, and I’m pleased to share that we achieved this milestone last quarter,” Zuckerberg said in a blog post.

“This is important to us because it sets Facebook up to be a strong independent service for the long term.”

Facebook’s announcement is significant in that the Palo Alto, California, company, unlike other Web giants such as Amazon, eBay, Google and Yahoo!, had yet to prove how it would translate traffic growth into cash.

Zuckerberg, who created Facebook with two Harvard University roommates five years ago, did not provide any financial details but the company is believed to pull in hundreds of millions of dollars a year from advertising.

The chief executive also announced that “as of today, Facebook now serves 300 million people across the world.”

Facebook signed up its 200 millionth user in April.

US software giant Microsoft bought a 1.6 percent stake in Facebook in 2007 for 240 million dollars, valuing the social network on paper at 15 billion dollars.

A Russian Internet company invested 200 million dollars in a nearly two percent stake in Facebook in May in a deal that valued the social networking giant at 10 billion dollars.