Yesterday was Facebook’s birthday. At five years old the site has accumulated 150 million active users worldwide; an achievement that is incredible considering that’s up from 98 million in 2008. This tremendous growth has allowed Facebook to displace places MySpace as the leading social media site in terms of total worldwide users, although MySpace does still hold the lead in the U.S.

Facebook is now at a critical juncture where it has built a large user base, but it now has to figure out how to monetize it and find a path to profitability. Facebook’s founder and CEO Mark Zuckerberg recently predicted that 2009 will be “intense” as it begins to address this.

Currently, Facebook seems to have three different areas from which it draws revenues.

• Advertising (Engagement Ads, Facebook Beacon, etc.)
• Marketing services (Facebook Lexicon, Corporate Polling, etc.)
• User products or services (apps, gifts, etc.)

The $9 to $15 billion question is whether these businesses will be enough, and if not, what other ways Facebook could sustainably exploit its huge user base.

Similar to this posting in 500 Hats, I’ve always thought that Facebook’s vast social network could be leveraged towards some type of friend referral system. Many people rely on such word of mouth recommendations when they’re navigating shopping sites like Amazon or using services like iTunes or Netflix. Reviewers at Amazon who earn credibility through well-received reviews become ‘Top Reviewer.’ Netflix users can opt to link accounts with friends they already know. Obviously these recommendation systems, when well implemented, enhance the shopping experience, generating both greater purchasing and more frequent visits.

What’s missing from these recommendation systems is a link to a reviewer’s social network, whereby their background or peer standing could lend an even greater value. For example perhaps somebody who was shopping for a digital camera on Amazon would a review from a Facebook friend that recently purchased the item, as well links to album on Facebook containing photos they shot with the camera. Would a camera manufacturer offer the reviewer some incentive for a probable customer, or even more for a purchase? What if the photos were taken in New Zealand and the same person then decided to check out how much tickets are going for right now? Would an airline offer similar incentives for being allowed to link to a personal travel album?

There are obviously certain marketing opportunities that remain to be developed within social networks. However it seems to me that there are three obstacles with these models. The first, as mentioned by Zuckerberg a year ago, and as seen by the user outcries concerning Beacon, is that social networks can’t invade their users’ privacy, or at least use their information for marketing purposes without their consent. This permission requirement brings me to the second obstacle: I suspect is that Facebook is hesitant to implement a system which would overtly highlight a user’s value to advertisers. This would lay the foundation for users to demand compensation for their marketing value, be it their network or recommendations. As analog dollars have translated to digital dimes, I doubt many companies would welcome the idea of further reducing their revenues by paying out pennies to users. Lastly, there is an inherent danger in making users marketing partners for companies. Users could always give bad reviews, or change brand loyalty.

In any case, I do believe that given the internet’s history and talk of Web 3.0, the path towards an open environment where social networks are linked to shopping sites, and where users become important business partners for brands, is inevitable. The only question remaining is which companies will most successfully develop these links and partnerships.