Updating as this plays out with deeper analysis and links...
Just a few moments ago, Facebook officially filed an S-1 for an initial public offering seeking to raise $5 billion. Here are a few key findings...
- 845 million monthly active users, year over year growth of 39%
- 483 million daily active users as of December, year over year growth of 48%
- 425 million monthly mobile users
- 100 billion friend connections as of December 31, 2011
- 2.7 billion Likes and comments per day during the last quarter of 2011
- $1 billion in profits in 2011
- $3.7 billion in revenues in 2011, soaring 88% between 2010 - 2011
- Profits grew 65% from $606 million in 2010
- Zynga makes up 12% of overall Facebook revenue
- Google posted $961.8 million in revenue and $105.6 million in profit when it initially went public...Facebook's profits are nearly 10x heading into its IPO
- Facebook 2011 profits were 1.6x that of Amazon, which posted a 45% drop in net income between 2010 and 2011 at $631 million
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UPDATE 1: The Hacker Way
Really appreciate the culture of Facebook as mentioned in the S-1 under the heading "The Hacker Way." Here's an excerpt:
The Hacker Way
As part of building a strong company, we work hard at making Facebook the best place for great people to have a big impact on the world and learn from other great people. We have cultivated a unique culture and management approach that we call the Hacker Way.
The word "hacker" has an unfairly negative connotation from being portrayed in the media as people who break into computers. In reality, hacking just means building something quickly or testing the boundaries of what can be done. Like most things, it can be used for good or bad, but the vast majority of hackers I've met tend to be idealistic people who want to have a positive impact on the world.
The Hacker Way is an approach to building that involves continuous improvement and iteration. Hackers believe that something can always be better, and that nothing is ever complete. They just have to go fix it - often in the face of people who say it's impossible or are content with the status quo.
Hackers try to build the best services over the long term by quickly releasing and learning from smaller iterations rather than trying to get everything right all at once. To support this, we have built a testing framework that at any given time can try out thousands of versions of Facebook. We have the words "Done is better than perfect" painted on our walls to remind ourselves to always keep shipping.
Hacking is also an inherently hands-on and active discipline. Instead of debating for days whether a new idea is possible or what the best way to build something is, hackers would rather just prototype something and see what works. There's a hacker mantra that you'll hear a lot around Facebook offices: "Code wins arguments."
Hacker culture is also extremely open and meritocratic. Hackers believe that the best idea and implementation should always win - not the person who is best at lobbying for an idea or the person who manages the most people.
UPDATE 2: Risks
As a matter of disclosure, Facebook must release risks to caution investors against buying blindly. Here is the full list as pulled from the S-1. I share it here with you to learn from Facebook's diligence in constant innovation or as they say "shipping." It's a healthy form of inspiration to always compete for the moment and for relevance over time.
1. users increasingly engage with competing products;
2. we fail to introduce new and improved products or if we introduce new products or services that are not favorably received;
3. we are unable to successfully balance our efforts to provide a compelling user experience with the decisions we make with respect to the frequency, prominence, and size of ads and other commercial content that we display;
4. we are unable to continue to develop products for mobile devices that users find engaging, that work with a variety of mobile operating systems and networks, and that achieve a high level of market acceptance;
5. there are changes in user sentiment about the quality or usefulness of our products or concerns related to privacy and sharing, safety, security, or other factors;
6. we are unable to manage and prioritize information to ensure users are presented with content that is interesting, useful, and relevant to them;
7. there are adverse changes in our products that are mandated by legislation, regulatory authorities, or litigation, including settlements or consent decrees;
8. technical or other problems prevent us from delivering our products in a rapid and reliable manner or otherwise affect the user experience;
9. we adopt policies or procedures related to areas such as sharing or user data that are perceived negatively by our users or the general public;
10. we fail to provide adequate customer service to users, developers, or advertisers;
11. we, our Platform developers, or other companies in our industry are the subject of adverse media reports or other negative publicity; or
12. our current or future products, such as the Facebook Platform, reduce user activity on Facebook by making it easier for our users to interact and share on third-party websites.
UPDATE 3: Facebook's Friends or Who Owns Facebook
Ken Yeung over at bub.blicio.us found this interesting graphic complied by Learnvest based on data published by The WSJ and The Guardian. It's a visual look at the distribution of Facebook stock. Some interesting pre-trading numbers reveal just how big this IPO is worth to the market, employees, investors, and partners.
UPDATE 4: A Letter from Mark Zuckerberg
Mark Zuckerberg urges understanding before investment. This is an approach that conditions investors for a long-term play rather than a quick and profitable turn. As important, is the focus on culture and values. Facebook invests emotion and aspiration in its mission and purpose, something I think more companies should consider to effectively connect with the human network (you and me).
Here are some highlights...
Facebook was not originally created to be a company. It was built to accomplish a social mission - to make the world more open and connected.
Zuckerberg believes that personal relationships are the fundamental unit of our society
Facebook's 5 core principles are 1) Focus on impact, 2) Move Fast, 3) Be Bold, 4) Be Open, and 5) Build Social Value.
The Facebook team is inspired by technologies that have revolutionized how people spread and consume information.
Facebook hopes to strengthen how people relate to each other.
Even though Facebook's mission sounds big, the company is focusing on starting small - with the relationship between two people.
Facebook is building tools to help people connect with the people they want and share what they want, and by doing this we are extending people's capacity to build and maintain relationships.
Facebook has already helped more than 800 million people map out more than 100 billion connections with a goal of accelerating this "rewiring."
Facebook seeks to improve how people connect to businesses and the economy.
The company believes a more open and connected world will help create a stronger economy with more authentic businesses that build better products and services.
Facebook observes that as people share more, they have access to more opinions from the people they trust about the products and services they use. As a result, the global social network strives to makes it easier to discover the best products and improve the quality and efficiency of their lives.
This quote by Zuckerberg really captures the spirit of Facebook's mission, "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. 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."
More data available at SEC.gov.