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Net income in the first half of 2011 came to almost $500 million, according to the source, who wished to remain anonymous because privately held Facebook does not disclose its results.

Facebook's stronger results come as investors have pushed its valuation to roughly $80 billion in private markets, with many industry observers expecting the world's No. 1 Internet social network to go public in 2012.

Its growing popularity among advertisers and its 750 million users has pressured entrenched Web companies such as Yahoo Inc, which ousted its chief executive Carol Bartz on Tuesday.

"We really see Facebook as becoming like the operating system for delivering ads on the Internet," said Dave Williams, the CEO of Blinq Media, which runs ad campaigns for companies on Facebook.

Search leader Google Inc launched Google+, a rival social network in June that attracted more than 10 million users in its first two weeks. Google has yet to offer ads on its social network, but it is trying to increase Google+'s appeal to consumers by offering games such as Zynga Poker and Rovio's Angry Birds.

Some venture capitalists and industry experts see early signs that Google+ is headed down the right path in taking a bite out of Facebook.

FROM DORM ROOM TO MARKETS

Facebook earned $355 million in net income in the first nine months of 2010 on revenue of $1.2 billion, according to documents that Goldman Sachs provided to clients during a share offering this year.

The source did not provide figures for a direct comparison for the first half 2011 figures.

Created by CEO Mark Zuckerberg in a Harvard dorm room in 2004, the company is expected to introduce new features this month such as music services from Spotify and Rhapsody, according to people familiar with the plans.

Facebook has become one of the Web's most visited destinations by people who spend hours on the site every month sharing photos and videos, and conversing with friends.

Facebook accounted for nearly one-third of all Internet display advertisement impressions in the United States in June, more than the combined total of Yahoo, Microsoft Corp, Google and AOL Inc, according to analytics firm comScore.

Large brand advertisers as well as local businesses are increasingly spending marketing dollars on Facebook, drawn by its vast number of users and the ability to target ads to consumers based on their interests, said Blinq Media's Williams.

Facebook's social network, in which users endorse products and companies by "liking" pages, provides a treasure trove of valuable data that other online services can't match, he said.

"Companies like Yahoo are relying on third party user behavioral data based on things like cookies. On Facebook that's data that users have revealed about themselves," he said.

Facebook's increasing allure to marketers has helped boost the rates for its ads. The price that companies pay for every consumer that clicks on a Facebook ad increased 62 percent between the fourth quarter of 2010 and the second quarter of 2011, according to Efficient Frontier, another firm that helps companies deliver ad campaigns on Facebook.

It was not clear what portion of Facebook's $1.6 billion in revenue in the first half of the year came from advertising sales. Facebook also gets a 30 percent cut of sales of virtual goods, such as digital cars or animals, that enhance the experience in social games such as Zynga's FarmVille.

In January, Facebook said it had raised $1.5 billion from investors including Goldman Sachs and Digital Sky Technologies, as well as through a private offering to overseas investors conducted by Goldman Sachs, at a valuation of roughly $50 billion.

Facebook declined to comment on its financial results.

(Editing by Edwin Chan, Derek Caney and Richard Chang)

Japan's Nikkei average climbed 2 percent while European stocks were up 2.5 percent in early trade, bouncing off 2-year closing lows hit in the previous session, although the rally was seen as a short-term technical bounce.

European equities increased their gains after Germany's Constitutional Court rejected a series of lawsuits aimed at blocking Germany's participation in bailout packages for Greece and other euro zone countries. The country's highest court said, however, that the German government must seek the approval of parliament's budget committee before granting such aid, a requirement which could further slow down Europe's response to the debt crisis.

Yahoo Inc will be in the spotlight after Chairman Roy Bostock fired CEO Carol Bartz over the phone on Tuesday, ending a tumultuous tenure marked by stagnation and a rift with Chinese partner Alibaba. Chief Financial Officer Tim Morse will step in as interim CEO, and the company will search for a permanent leader to spearhead a battle in online advertising and content with rivals Google Inc and Facebook.

Shares of Yahoo traded in Frankfurt were up 11 percent.

Chevron Corp has made a deepwater discovery in the Gulf of Mexico at the Moccasin prospect, the site of the first exploratory well permit after the end of last year's deepwater moratorium. Shares in BP, Chevron's partner in the project, gained 3.2 percent.

Bank of America Corp, which has lost almost half of its market value this year, announced a broad reorganization on Tuesday that includes the departure of two senior executives.

President Barack Obama, facing waning confidence among Americans in his economic stewardship, plans some $300 billion in tax cuts and government spending as part of a job-creating package, U.S. media reported on Tuesday. The price tag of the proposed package, to be announced by Obama in a nationally televised speech to Congress on Thursday, would be offset by other cuts that the president would outline, CNN reported, citing Democratic sources.

U.S. energy giant ConocoPhillips moved to repair its frayed relations with Chinese regulators on Wednesday, apologizing for an oil spill in northern China's Bohai Bay and saying it will establish a fund to cover the clean-up costs.

U.S. stocks fell for a third day on Tuesday as Europe struggled to convince markets it can tackle its debt crisis, but shares trimmed their losses in the wake of better-than-expected ISM non-manufacturing PMI data.

The Dow Jones industrial average ended down 0.9 percent, the Standard & Poor's 500 Index fell 0.7 percent, and the Nasdaq Composite Index lost 0.3 percent.

(Reporting by Blaise Robinson; Editing by Hans-Juergen Peters)

The constellation of asset price action reflected risk taking among investors, who had been mostly driven for the past few weeks by fears that still lingered about a euro zone break up and global recession.

The Australian dollar rallied 1 percent, climbing above $1.06, U.S. Treasury yields edged higher and gold tumbled on a sudden large sell order in thin trading conditions.

The Swiss franc, which had been along with gold the safe haven of choice for investors, kept to a relatively tight trading range above 1.2000 per euro, the day after the Swiss central bank said it would buy foreign currencies in "unlimited quantities" to enforce a cap on the currency versus the euro.

"The stock market is rebounding after steep declines in recent days, but the situation has not changed and volatility remains high," said Korea Investment Trust Management fund manager Kim Young-il in Seoul.

"Uncertainty is high about the direction of the U.S. economy, and uncertainty is even higher in Europe as investors are not sure whether the bloc is going in the right direction."

Japan's Nikkei share average .N225 rose 2.0 percent, coming off a two-and-a-half year closing low on Tuesday, and MSCI's broadest index of Asia Pacific shares outside Japan .MIAPJ0000PUS gained 2.3 percent.

The biggest gainers in the MSCI index were the tech and materials sectors, as electronics exporters such as South Korea's Samsung Electronics (005930.KS) and miners like Australia's BHP Billiton (BHP.AX) posted strong gains.

Shares of electronics makers have taken some of the worst beatings in the global market rout of recent weeks on mounting worries about slowing consumer and corporate demand.

The Nikkei was trading at a price-to-book ratio of 0.95 as of Tuesday's close. That was the lowest since August 24 and before that the lowest since April 1, 2009. A price-to-book ratio below 1.0 for the Nikkei means that the market value of every stock in the index is less than if all the companies' assets were liquidated.

Value-driven investors, though, were not returning in hordes to scoop up bargains.

"It's a short-term rebound. I'm rather pessimistic," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

AUSTERITY DEMANDS

The euro zone's most indebted and high risk nations were scrambling on Wednesday to convince investors and the rest of Europe of their commitment to tackle their debt problems, even as the bloc's main paymaster Germany faced increasing opposition to further aid.

An unexpected jump in a U.S. services sector index, however, helped stocks on Wall Street pare losses into the close and end down less than 1 percent.

S&P 500 futures traded in Asia rose about 0.6 percent on Wednesday. .N

Investors are now focusing on a speech by U.S. President Barack Obama to Congress on Thursday, which CNN reported would include plans for a $300 billion jobs package.

The euro rose about 0.4 percent to around $1.4060, still not far from a two-month trough plumbed on Tuesday.

The dollar, pressured by disappointment that the Bank of Japan took no action at a policy meeting, was down 0.6 percent at around 77.19 yen, coming off an overnight high of 77.74.

Speculation had risen on Tuesday that Japan may introduce measures to curb currency strength after Switzerland's shock move.

The Swiss franc plunged nearly 10 percent against the euro on Tuesday, its biggest daily fall ever, after the Swiss central bank jolted markets by drawing a line in the sand on how much the currency can gain.

"While we would not stand in the way of the SNB move, we question whether the SNB will be fully successful in maintaining 1.20 if global risks accelerate," BNP Paribas strategists wrote in a note.

In commodities markets, spot gold fell further after striking a new record above $1,920 following the Swiss National Bank move. A large sell order caught traders off guard and triggered automatic sell orders, taking the metal to as low as

$1,826.18.

Brent crude prices rose on Tuesday after three straight declines as tight North Sea supplies, continuing uncertainty about Libya's oil and more tropical storms boosted prices.

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Brent crude was up about 0.4 percent to $113.30 a barrel on Wednesday, while U.S. crude gained 0.4 percent to $86.35 a barrel.