"It is pulling even with Orkut in India, where only a year ago, Orkut was more than twice as large as Facebook," the report by the New York Times said.
"In the last year, Facebook has grown eightfold, to eight million users, in Brazil, where Orkut has 28 million," it added.
The 26-year-old CEO of Facebook, Mark Zuckerberg, has predicted that Facebook users would reach one billion people but did not say when.
Skeptics, however, are no longer disputing the claim.
They have been more innovative than any other social network, and they are going to continue to grow, said Jeremiah Owyang, an analyst with the Altimeter Group.
"Facebook wants to be ubiquitous, and they are being successful for now," NYT said.
The report said the ascent of Facebook posed a challenge for Google in several areas and already had the giant search engine worried.
"There is nothing more threatening to Google than a company that has 500 million subscribers and knows a lot about them and places targeted advertisements in front of them," said Todd Dagres, a partner at Spark Capital, a venture firm that has invested many social networking firms, like Twitter.
"For every second that people are on Facebook and for every ad that Facebook puts in front of their face, it is one less second they are on Google and one less ad that Google puts in front of their face," he added.
The report attributed Facebook's efforts to make the network available in different languages as one of the main drivers of this global expansion.
While the number of users in the United States doubled in the last year to 123 million, the number tripled in Mexico to 11 million and more than quadrupled in Germany to 19 million.
However, the Web site is largely blocked in China. With fewer than a million users each in Japan, South Korea and Russia, it lags far behind home-grown social networks in those major markets.
It has growing revenue at nearly USD 1 billion annually. Bing Gordon, the maker of popular games like FarmVille and Mafia Wars, told NYT that Facebook had hired some of the best engineers in Silicon Valley.
"They have opened up a platform, and they have the best apps on that platform," he said.