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Facebook finally goes publicBy Ryan Noik 2 February 2012 | Categories: news
One of the notable, newsworthy developments this week is that Facebook has filed an initial public offering (IPO) and plans to raise an impressive $5 billion (R40 million) from sales of its stock.
According to the Washington Post, this would make it the largest initial public offering of an internet company to date. Additionally, the newspaper continues that this could propel Facebook’s valuation into the $75 billion to $100 billion range.
In documents filed with the Securities and Exchange Commission, the company’s profits showed impressive growth since 2009, recording $777 million in that year, more than doubling to $1.974 billion in 2010. It almost doubled again last year to reach $3.711 billion.
Those aren’t the only staggering numbers that Facebook boasted though. According to PCMag, the popular social network currently has 845 million users, with 250 million photos uploaded daily, and receives 2.7 billion likes and comments per day, proving that users still like ‘liking’ and sharing information eight years after Facebook’s beginnings.
The filing also meant for the first time, details about how Facebook’s earns its impressive revenues became public. The Washington Post noted that the vast majority of the social network’s revenue comes from “selling display ads targeted to its users who have revealed to Facebook much about their lives.”
It added that according to experts, those connections and activities among its 845 million members were “an advertiser’s dream.”
To the point
While Mark Zuckerberg, Facebook’s chief executive officer, had a base salary last year of $500 000, and received $220 500 as a bonus at the beginning of the year, if Facebook’s valuation reaches $100 billion, his net worth would be almost $30 billion, as he owns 28.4% of the company.
The filing came as little surprise though – the Wall Street Journal began anticipating the move towards the end of last year.
Then in the same month, Zuckerberg was quoted as commenting on the Charlie Rose show that ‘the idea behind going public is to be able to give back to those who invested in the company and helped it grow with their engineering talent. One of the ways you do that is to compensate people with equity and options."
Facebook’s shares are expected to begin trading later this year.
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