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The echo-chamber has flooded the web with all the details following the filing of Facebook’s IPO. It will raise $5 billion in the listing. It will be valued somewhere between US$75-billion and US$100-billion. We even know that the graffiti artist who took stock instead of cash for painting the walls at Facebook’s first HQ is now worth US$200 million. But what’s behind the numbers and how do they compare?
1. We’re all going mobile
Out of 825-million monthly users on Facebook, more than half — 425-million active users — access the site via mobile. These are people who use the site via a mobile app (its app is the most downloaded on the iTunes App Store) or via a mobile-optimised version of the website. Mobile users grew by 21% over the last four months. As many point out, the company doesn’t currently serve any advertising on its mobile site or apps.
2. The Russian connection(s)
Emerging market media giant Naspers’s indirect stake in Facebook is worth US$720-million (assuming a US$100-billion valuation for the social network). It “inherited” an indirect 0.72% stake in Facebook via its investment in Russian outfit Digital Sky Technologies. DST owns 5.5% of Facebook, and has so far invested a total of US-$900 million in the company.
3. Zuckerberg is large and in charge
Mark Zuckerberg owns a 28.2% stake in the company, but controls just over 50% of the voting power due to a mix of A- and B-class shares. At a US$100-billion valuation, his share is worth $28-billion. This would make him the ninth-richest person in the world according to the latest Forbes rankings, behind usual suspects Mexican tycoon Carlos Slim Helu, Bill Gates, and Warren Buffett, but ahead of the Walton family members who own Walmart, and about US$10-billion richer than Google co-founders Larry Page and Sergey Brin are each worth (US$19.8-billion).
4. It brings in some serious dough
Its revenues and net income per year paint an interesting story. Revenue grew by 25 times between 2007 and 2011. Revenues by year: 2007: US$153-million; 2008: US$272-million; 2009: US$777- million; 2010: US$1.974-billion; 2011: US$3.711-billion. Net income by year: 2007: -US$138-million; 2008: -US$56-million; 2009: US$229-million; 2010: US$606-million; 2011: US$1-billion.
5. Zynga is a massive cash cow
Revenue comes primarily from advertising, although in the past 18 months social games powerhouse Zynga is responsible for an ever-growing portion of its revenue. In 2009, 98% of Facebook’s revenue came from advertising. In 2010, it was 95% and last year only 85%. Last year, Zynga accounted for 12% of Facebook’s revenue, or US$445-million!
6.Facebook vs Google
As MG Siegler points out: “Facebook revenue and profit are about one tenth of that of Google (which went public over seven years ago).” And, “Facebook has more profit than Google had revenue when they went public.” (Google had $961.8 million in revenue and US$105.6-million in profit when it went public). Facebook has 3 200 employees, compared with the search giant’s more than 20 000. (Also, Facebook had nearly double the profits of Amazon in 2011).