Facebook files Form S-1 to raise $5 billion in initial public offering
Facebook, which earned $1 billion last year on sales of $3.7 billion, and which has over 845 million active monthly users, today filed to raise $5 billion in an IPO. Analysts predict that the valuation for Facebook will ultimately be between $85 billion and $100 billion. The S-1 form filed with the Securities and Exchange Commission revealed that the $3.7 billion in revenue last year was approximately DOUBLE that of the previous year and that profits last year grew 65% to $1 billion. In the past two years, Facebook’s revenue rose almost fivefold, and its profit more than quadrupled. (The Registration Statement on Form S-1 is here.)
The HUGE amount of data gathered on the HUNDREDS of MILLIONS of Facebook users means a vast audience for targeted marketing!
Facebook also listed payments for goods as another revenue opportunity. The social network serves as a platform for developers to sell their goods–virtual and otherwise–and from which the company takes a cut. The company said Zynga, which makes games like Farmville on Facebook, represented 12 percent of its total revenue in 2011. No other customer accounted for more than 10 percent of revenue, but the company warned that it would suffer if it didn’t maintain a good relationship with the social-gaming company.
The payments business still remains a small part of the total company’s revenue. Advertising in 2011 accounted for 85 percent of its revenue, although that chunk had shrunk considerably from 2010.
Facebook does not display ads in its mobile app, which could be a risk if more users check in using their smartphones. “Other risks included government actions in different countries, new products and services failing, and a slowing rate of growth over time.”
As for Mark Zuckerberg, he owns 28% of Facebook and is the single largest shareholder.
-Bill at
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