A piece on alleyinsider talking about Facebook’s need for more servers. In case you haven’t noticed, Facebook has really taken off like a rocket since letting us creepy old people onto the site. While Facebook doesn’t generate much revenue, they do generate lots of hardware needs.
In years past, Rackable was a big beneficiary of Facebook spending. Such may not be the case now – in fact, Facebook represents 18% of accounts receivable at Rackable (search this document for facebook) but wasn’t a 10% customer last year. This adds up to roughly 5 million dollars they still owe Rackable -- Facebook may need this cash to pay for servers they already have. That said, back in the glory days of Rackable stock, Facebook’s potential spending made the stock fly. I’m long some Rackable, hoping for some errant speculation that Dell may make a run at them.