Facebook announced today that it is to go public, eight years after its hacker CEO Mark Zuckerberg launched the company in his Harvard dorm room.
Any investor will now be able to buy in to Silicon Valley's hottest property, and the company is set to make its stock-market debut in three or four months as one of the world's most valuable companies.
Facebook, which is now based in Menlo Park, California, hopes to list its stock under the ticker symbol 'FB' on the New York Stock Exchange or Nasdaq Stock Market.
In its regulatory filing with the Securities and Exchange Commission, Facebook Inc. indicated it hopes to raise $5billion in its IPO - a new record for a technology company, surpassing Google's $1.9billion IPO in 2004.
Although the company did not provide an estimate for its total worth, previous deals have valued the firm at around $100billion.
This is a remarkable turnaround for a company which, as its founder explained in a letter attached to the filing, 'was not originally created to be a company', and still uses 'The Hacker Way' to guide its development.
The filing laid bare a number of key facts about the previously secretive firm - and exposed Mr Zuckerberg's strict control over many aspects of the company's management.
The site has 845million active users, and half of them typically visit the site on any given day.
While it may seem that everyone in the English-speaking world has a Facebook account, in fact the site has only penetrated 60 per cent of the market in the U.S. and the UK, and is most popular in Chile, Turkey and Venezuela.
The filing makes it clear that China, where Facebook is currently banned, is the next big target - but expresses doubt that it can craft a censorship policy which would be 'acceptable to us and to the Chinese government'.
Even without access to the Chinese market, and with relatively few users in countries like Japan and South Korea, Facebook managed to make $668million in profit last year, out of total revenue of $3.7billion.
Advertising accounted for 85 per cent of that revenue, but that was less than in previous years thanks to the spectacular success of games company Zynga, which contributed 12 per cent of Facebook's revenue through royalties which amount to 30 per cent of the money spent on Zynga's games via Facebook.
And despite the runaway growth of Facebook since its origins in 2004, amazing power remains concentrated in the hands of one man: Mr Zuckerberg.
Despite owning no more than a quarter of shares, he will control 57 per cent of votes even after the sale of shares to the public.
The company's filing even singled out Mr Zuckerberg's control as a major risk which could jeopardise the company's performance in future - it pointed out that he was able to vote 'in his own interests, which may not always be in the interests of our stockholders generally'.
But he will not prove much of a burden to the company financially - his salary, which was $500,000 in 2011, is set to drop to just $1 next year.
He is unlikely to miss his salary, however, as Forbes magazine estimated Mr Zuckerberg's wealth at $17.5billion in its most recent survey of the richest people in the U.S.
Other risk factors mentioned in the IPO document include the fast pace of the technology business, the possibility of negative publicity and faults in the company's privacy policy - a repeated source of complaints from users.
The company is also, perhaps surprisingly, concerned too many users will adopt Facebook apps for smartphones and other mobile devices - because the apps do not carry advertising, and therefore do not bring in revenue for the site.
In a letter included in the filing, Mr Zuckerberg painted a rosy, idealistic picture of Facebook.
'Facebook aspires to build the services that give people the power to share and help them once again transform many of our core institutions and industries,' he wrote.
'At Facebook, we?re inspired by technologies that have revolutionised how people spread and consume information. We often talk about inventions like the printing press and the television ? by simply making communication more efficient, they led to a complete transformation of many important parts of society.
'Today, our society has reached another tipping point. We live at a moment when the majority of people in the world have access to the internet or mobile phones ? the raw tools necessary to start sharing what they?re thinking, feeling and doing with whomever they want.'
Mr Zuckerberg also pledged to stay true to Facebook's scrappy roots even on the road to becoming a multinational corporation.
'The word "hacker" has an unfairly negative connotation from being portrayed in the media as people who break into computers,' he wrote. 'In reality, hacking just means building something quickly or testing the boundaries of what can be done.'
http://www.dailymail.co.uk/news/arti...-IPO-ever.html
Any investor will now be able to buy in to Silicon Valley's hottest property, and the company is set to make its stock-market debut in three or four months as one of the world's most valuable companies.
Facebook, which is now based in Menlo Park, California, hopes to list its stock under the ticker symbol 'FB' on the New York Stock Exchange or Nasdaq Stock Market.
In its regulatory filing with the Securities and Exchange Commission, Facebook Inc. indicated it hopes to raise $5billion in its IPO - a new record for a technology company, surpassing Google's $1.9billion IPO in 2004.
Although the company did not provide an estimate for its total worth, previous deals have valued the firm at around $100billion.
This is a remarkable turnaround for a company which, as its founder explained in a letter attached to the filing, 'was not originally created to be a company', and still uses 'The Hacker Way' to guide its development.
The filing laid bare a number of key facts about the previously secretive firm - and exposed Mr Zuckerberg's strict control over many aspects of the company's management.
The site has 845million active users, and half of them typically visit the site on any given day.
While it may seem that everyone in the English-speaking world has a Facebook account, in fact the site has only penetrated 60 per cent of the market in the U.S. and the UK, and is most popular in Chile, Turkey and Venezuela.
The filing makes it clear that China, where Facebook is currently banned, is the next big target - but expresses doubt that it can craft a censorship policy which would be 'acceptable to us and to the Chinese government'.
Even without access to the Chinese market, and with relatively few users in countries like Japan and South Korea, Facebook managed to make $668million in profit last year, out of total revenue of $3.7billion.
Advertising accounted for 85 per cent of that revenue, but that was less than in previous years thanks to the spectacular success of games company Zynga, which contributed 12 per cent of Facebook's revenue through royalties which amount to 30 per cent of the money spent on Zynga's games via Facebook.
And despite the runaway growth of Facebook since its origins in 2004, amazing power remains concentrated in the hands of one man: Mr Zuckerberg.
Despite owning no more than a quarter of shares, he will control 57 per cent of votes even after the sale of shares to the public.
The company's filing even singled out Mr Zuckerberg's control as a major risk which could jeopardise the company's performance in future - it pointed out that he was able to vote 'in his own interests, which may not always be in the interests of our stockholders generally'.
But he will not prove much of a burden to the company financially - his salary, which was $500,000 in 2011, is set to drop to just $1 next year.
He is unlikely to miss his salary, however, as Forbes magazine estimated Mr Zuckerberg's wealth at $17.5billion in its most recent survey of the richest people in the U.S.
Other risk factors mentioned in the IPO document include the fast pace of the technology business, the possibility of negative publicity and faults in the company's privacy policy - a repeated source of complaints from users.
The company is also, perhaps surprisingly, concerned too many users will adopt Facebook apps for smartphones and other mobile devices - because the apps do not carry advertising, and therefore do not bring in revenue for the site.
In a letter included in the filing, Mr Zuckerberg painted a rosy, idealistic picture of Facebook.
'Facebook aspires to build the services that give people the power to share and help them once again transform many of our core institutions and industries,' he wrote.
'At Facebook, we?re inspired by technologies that have revolutionised how people spread and consume information. We often talk about inventions like the printing press and the television ? by simply making communication more efficient, they led to a complete transformation of many important parts of society.
'Today, our society has reached another tipping point. We live at a moment when the majority of people in the world have access to the internet or mobile phones ? the raw tools necessary to start sharing what they?re thinking, feeling and doing with whomever they want.'
Mr Zuckerberg also pledged to stay true to Facebook's scrappy roots even on the road to becoming a multinational corporation.
'The word "hacker" has an unfairly negative connotation from being portrayed in the media as people who break into computers,' he wrote. 'In reality, hacking just means building something quickly or testing the boundaries of what can be done.'
http://www.dailymail.co.uk/news/arti...-IPO-ever.html
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