What We Learn from Facebook Going Public
By Ryan Moore
Facebook’s status has been set to “public,” but in a whole different way. Wednesday the company filed with the Securities and Exchange Commission to take the company public with an IPO (initial public offering) of 5 billion dollars. This was less than what many rumored, but still is a hefty bit of change. According to Mashable, if the company can raise the funds, it will be one of the largest tech IPOs of all time.
With the offering came a lot of details of the private company that have yet to have been revealed before. The Verge sifted through the company’s released data and unearthed some gems that are worth noting. See a few of them below:
Sure, Facebook is popular, but just how popular? According to the released information, the social network accounts for 800 million monthly active users with a little more than 1/2 of them (483 million) being daily active users. To put that in perspective, Twitter mentioned in 2010 that they had 145 million “registered users.” In other words, a person could start a Twitter account, poke around to see what all the fuss was about, then never log in again, but still be considered a “registered user.” To say that Facebook has 483 million active users is pretty staggering.
Despite the rumors, Facebook is still free and will probably be so for a while. Where does it get its money ($1 billion alone in 2011) then? Well, it used to be safe to say all from advertising. In fact in 2009 98% of its revenue did come from advertising, but with the released IPO information, it is noted that 12% of Facebook’s revenue in 2011 came from the social company Zynga, who makes the popular, and some would say, annoying, games like Words with Friends and FarmVille. The system is similar to Apple’s App Store model where Facebook keeps “a fee of up to 30% of the face value of user purchases in Zynga’s games” that are played on the social network.
Finally, just how much is Mark Zuckerberg worth for his dorm room creation at Harvard just 8 short years ago? Well, the 27 year old CEO will be pulling in $600,000 this year, a $100,000 increase from last year but will be following the likes of Steve Jobs and Google co-founder Larry Page in 2013 by decreasing his salary to a dollar. Don’t worry though, Mark will be able to compensate that dollar with the 28.4% shares of the company he will retain.
Would you invest in Facebook? Do you see it sticking around or going away in the long run? Sound off in the comments below.
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