By Michal Lev-Ram
November 7, 2008

By Michal Lev-Ram

SAN FRANCISCO – Last year Facebook CEO Mark Zuckerberg showed up at the Web 2.0 Summit in sandals and dodged questions about Microsoft’s then-rumored $240 million investment in the company.

This year, he showed up in tennis shoes and told the crowd of techies that Facebook doesn’t need any more funding, despite recent rumors that the Palo Alto-based social networking site is looking to raise another round of financing. Zuckerberg also said that instead of a hiring freeze or layoffs (which have plagued many local companies in recent weeks), Facebook is actively looking for more “really good technical people.” The company currently has about 700 employees.

Microsoft’s (MSFT) infusement of cash brought Facebook’s valuation to $15 billion late last year, shocking many in the industry. Web impresario John Battelle, who interviewed Zuckerberg on stage, asked the young CEO if he thought Microsoft is happy with the price they paid.

“The deal was about more than the investment,” said Zuckerberg, who emphasized the two companies are working together on ad placement and search functions. “I think a lot of people obsess over the price that they paid.”

Facbook says it now has over 120 million users. But despite its popularity, the site has been criticized for not having a proven revenue model. Zuckerberg said some have misunderstood his emphasis on growing the site to mean that the company doesn’t have a strategy for making money. Facebook, he noted, has several revenue strategies — including brand sponsors and ads. (Battelle added a third — Microsoft).

“They are both strong and growing quickly,” said Zuckerberg, who would only say revenues are in the “hundreds of millions.” As an example, he cited a New York Times ad that prompted more than 200,000 people to pass around an article on Barack Obama’s presidential victory.

Zuckerberg also discussed Facebook Connect, a new iteration of the company’s platform which will allow developers to create applications outside the site. But he admitted the first version, reportedly launching later this month, won’t be a direct source of new revenue.

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