Is Facebook in trouble?

By almost all metrics, Facebook is the top dog in the social networking market. Even though it's now 5 years old, it's still growing like a weed and there's no reason to believe that its growth is going to subside anytime soon.

But is the company increasingly troubled?

It was reported last week that the Silicon Valley-based company is hunting for $100m in additional debt financing after its existing lenders were no so quick to provide it, leading to renewed questions about the company's financial health.

Facebook insists that it's healthy and actually operated at near break-even last year but since it's privately-held, the public doesn't have a full accounting of its finances and speculation persists.

Yesterday fuel was added to the fire when Facebook's CFO, Gideon Yu, abruptly left the company. Yu negotiated Microsoft's investment in Facebook at the much-talked-about $15bn valuation. Prior to joining Facebook, he was YouTube's CFO and negotiated its blockbuster billion-dollar sale to Google. So it's no surprise that Mark Zuckerberg spoke highly of Yu when he joined Facebook.

The word on the street is that Yu and Zuckerberg began to clash heads. Zuckerberg is said to value growth over revenue and is less concerned about monetization than investors and prospective investors. Yu is far from the first Facebook executive to depart under suspicious circumstances; in fact, he joins a list that is growing quite large and includes Zuckerberg's co-founders. Apparently, you're either with Zuckerberg or you're out.

Of course, all of this comes from the rumor mill so it should be taken with a grain of salt. Facebook is officially painting a much different picture: it needs a CFO with public company experience.

Some have pointed out that Yu had plenty of public company experience, lending credence to the clash-of-personality theories, but the main point is that Facebook has dropped a not-so-subtle hint that it may go public sooner than later.

That probably isn't a good thing. While Facebook does have hundreds of millions of dollars in revenue and would represent the first sizable pure-play social networking investment available through the public markets in the United States, Facebook is far from a sure bet. Social network monetization is still on very shaky ground, most of its massive growth is being fueled by new members in countries that are hard to monetize and the steady stream of executive departures is not what investors like to see at young companies. With the cost burdens of massive growth, one has to wonder if this could all be a recipe for disaster.

But even more importantly, as The Guardian asks: "who would think about going public at a time like this?"

If Facebook can't get the type of love it seeks in the private equity markets, it's hard to see the public markets, which have been bruised and battered, being any more generous. Facebook had always talked about an IPO sometime past 2009-2010 and that was before the global economy ran into trouble. Right now it's unlikely that the company would be given anywhere near the valuation it has been rumored to be seeking from private investors, leading one to believe that Facebook would want to hold out for as long as possible before going public.

As I see it, Facebook is walking a very fine line. It has built an incredible service that so many people love but financially it may be pushing the limits, putting its future in jeopardy. I hope that it manages to pull it off and that all of the talk is overblown but I remember what took place at a lot of companies as the first boom started to bust and some of the same warning signs are starting to appear.

Photo credit: Andrew Feinberg via Flickr.