[jemka]

>You have the users, the money, the connections and the engineering talent. So what's the problem?

Assuming you're looking beyond the simple answer (because they 're not selling a product/service the majority of their user-base will purchase), I'd say they suffer from the lack of agility. Facebook's size increases their effort to implement even the simplest of changes. We've seen how fickle those users are about little changes and future ones could affect the group in negative and unintended ways. I'm sure every change is examined to death before implementation. In contrast, a start-up making changes might lose their early adopters, but could gain orders of magnitude more users because of that change. Facebook, however, already has the user-base. Facebook needs to keep them happy and drastically changing things in the name of profit would probably send people running. Of course not everyone will run and profit might increase, but those changes would have to be time consuming just from an implementation standpoint given their size and now being publicly traded the desire to keep the investors happy.

[spaghetti]

Good point about the lack of agility. Internal politics probably have a negative impact as well. I could see some team's feature going live for 1% of users then managers and other internal stake holders endlessly arguing about the measurements, data etc.