It’s seeking to raise more than $5billion by listing on the New York Stock Exchange, although, that could rise to around $10billion. (Google raised $2billion in 2004 valuing the company at $25billion). That would value Facebook at more than $100billion, making the eight year old company the biggest US internet stock market listing, ever.
I love the fact that Facebook doesn’t make its money from subscriptions. It’s free to use.
Much of its revenue comes from those ads you see on the right hand side of your news feeds, often attached to a news story. Often, these ads have been specifically targetted to your interests thanks to technology which identifies what you like, based on key words you enter into the social networking site.
Another form of revenue is though social gaming, like Farmville. Facebook takes a share of the profits made from these services provided by third parties.
The challenge for Facebook, is to continue growing. China has a population of more than one billion, but the website doesn’t operate there. It’s government blocked access to Facebook since 2009.
In its IPO filing documents, it says that it will continue to evaluate entering China, but that substantial legal and regulatory complexities have prevented its entry into China to date.
Facebook is however, available in 70 languages.
The numbers are against it though, with many newly listed tech companies seeing their share prices fall following their debut.
LinkedIn’s saw its share price climb as high as US$122 on its debt, settling at US$94.25, up from US$45 from its initial price. It currently trades around US$70.
Google however, made its investors rich. It’s IPO set the share price at US$85. It currently trades at around US$580.
The IPO leaves the company wide open to public scrutiny because numbers now need to be made public.
It has 845 million users, up 39 per cent from a year ago. More than 400 million of these users, interact on the site daily!
Founder, Mark Zuckerberg owns just over a quarter of the company, with a 57 per cent share voting power.
That means, he could earn around $28billion from the float.
Not bad, for a 27 year old, with a simple idea at University.
I feel so inadequate.