Facebook’s growth, it seems, is limited only by the scope of Mark Zuckerberg’s ambition. It began as a social networking site trying to keep up with MySpace, but Facebook is now circling its own orbit.

All that’s stopping Facebook from becoming the pre-eminent news publisher for its 300m users is Zuckerberg’s desire to do it.

In an interview with The Wall Street Journal in 2007, Facebook founder Mark Zuckerberg alluded to a new stage to transform Facebook from simply a social media site into a diverse platform. He said that in future iterations, users would see “real stories being produced” on their Facebook feeds. 

The obvious question is, would Facebook want to get into the news business? It’s clear today that it’s not exactly profitable. Or is it that this current business approach is no longer profitable?

Though it’s unclear it would be a prudent decision, Facebook now has the tools to make an impact on the news industry

The people running Facebook with Zuckerberg clearly know something the others do not. It’s still a privately held company, with no immediate plans for an IPO, and it’s actually making money.

In a blog post Zuckerberg announced that Facebook went into profit this year, a year earlier than expected. What this means is Facebook, a service that more than 300 million people use free of charge, has suddenly turned a profit via revenue produced primarily from advertising, in the middle of a recession.

Since Facebook now has some cash to throw around, they’ve begun acquiring companies around them. Zuckerberg tried and failed to buy Twitter in 2008 with an offer that, given Twitter’s popularity today, amounted to highway robbery. But he was able to acquire real-time social network feed aggregator FriendFeed with a cash-and-stock offer it floated to Twitter unsuccessfully.

Flush with cash, one has to wonder what Zuckerberg plans to do next. News organizations and journalists keep openly suggesting/begging Google to buy a newspaper (or six), retrofit them and bring them into the 21st century. Google CEO Eric Schmidt has batted that suggestion down at every opportunity.

Both Facebook and Google make the majority of their revenue from ad sales. And much like Google, Facebook’s ad business is doing very, very well. And while year-end revenue has not yet been released, according to Inside Facebook, it’s expected to be around $550m. Here’s how it breaks own:

•    $125m from brand ads

•    $150m from Facebook’s ad deal with Microsoft

•    $75m from virtual goods

•    $200m from self-service ads.

Certainly eye-popping numbers. But when you consider that with 300m users, each of whom spent on average five hours and 12 minutes on the site in July, those numbers begin to make a bit more sense.

But what does this mean for news?

About 66% of Facebook’s users are between the ages of 18 and 34. They are the internet generation. They know how the web works, typically get news online or on mobile devices, and have always known news online to be free.

There have been blogs and news articles written suggesting that young people aren’t that well-attuned or interested in news. The reality of it is people expect news to find them. In a recent post at Harvard’s Neiman Lab, Gina M. Chen writes:

 [T]he news organizations — whether they be traditional newspapers or online-only news sources — that thrive and survive will be the ones where their news finds the most people.

On Facebook, the news will find them because it’s where they spend a lot of their time already. This is already happening on the site with the feature enabling users to post links to stories, videos, photos and web sites, which their friends can then visit and comment on.

In some ways Facebook is already a niche news aggregator. By ‘friending’ someone, you acknowledge shared interests and perspectives. When a friend posts a link to a news article, video or other media, you’re likely to click on it because of the inherent trust of having ‘friended’ them.

For an example of how Facebook could transition into a full-fledged news service, look to the creation of the Bay Area News Project. While it was founded and funded with $5m by California philanthropist F. Warren Hellman, what’s most interesting about it is the planned structure of it:

The project, Hellman says, will “rely on the UC Berkeley journalism students” who will serve as “foot soldiers for local stories,” attending town meetings, tracking school board elections and doing all the other work that has traditionally been the domain of metro reporters. Students won’t be required to participate but, he says, “the hope is to have dozens of grad students who are eager for experience” and willing to work for free for that experience.

Assisting will be about a dozen full-time professional journalists on board to assist the students and ensure journalistic standards.

This is a model that Facebook could forge ahead with if interested. The site could announce the development of a section of the web site devoted to original news and then ask users to get involved. In addition to being users, many college journalists also use it for journalistic purposes. Facebook could create regional news written by local students about local events. The allure of being seen by more than 300m people would excite any college journalist.

To curate, Facebook could hire professional journalists to coordinate coverage and ensure standards. According to Paper Cuts, a blog that maps journalist job losses, nearly 14,000 journalists have lost their jobs in the U.S. in 2009. The pool of exceptional journalists looking for work is very deep, which would be an advantage to Facebook in bringing on the best talent available.

Once the news site is built, a voting feature similar to Digg or tweetmeme could be built in. The highest or most-rated stories would appear on the main news home page. This would encourage writers to seek out the most interesting story on the promise of global exposure. 

There are some, like Robert Gammon of the East Bay Express, who equate student journalists working on journalism for free as ‘slave labor’ that would degrade the news ecosystem.

Likewise, the new venture promises to be bad for the public over the long term. It’s true that the Bay Area likely will experience an increase in local news coverage right away, but if the new venture forces traditional news organizations to further contract, then the public will be forced to increasingly depend on inexperienced, unpaid students to inform them about what’s happening in the region. 

This perspective is in line with what NYU journalism professor Jay Rosen calls the “Church of the Savvy”:

Church of the Savvy defines itself less by its own beliefs than by people it places outside the magic circle of realism.

In sum: Students will destroy Bay Area journalism because they’re new and young and willing to work for free and … and … they just don’t get it, man.

It could be both unwise and costly for Facebook to take this approach, should Zuckerberg decide to foray into news. Leveraging users’ abilities and interests for the benefit of Facebook might be a boon both for its image and for its profits, but it’s not altogether clear whether the possible boon would outweigh the costs. Though facebook has the resources to effect a major transformation, it would not be an easy transition; it wouldn’t be a runaway success overnight.

Facebook News isn’t a sure-thing. But it is well within the scope of Facebook’s ability. All that’s preventing it from happening is the ambition to do it.