‪Privacy Surrendered by Facebook in IPO Documents‬

The news was out late Wednesday when Facebook declared about filing its plans in order to raise $5 billion in an IPO(Initial Public Offering) of stock. The decision was awaited by all the prospective buyers, close competitors and media reporters from the past two years. During these two years, Facebook has made a great name for itself and has given a very tough competition to the most powerful company over the web, Google Inc.

To go with what the lawyers and bankers say, the prospectus that Facebook filed a 197-page long one that is full of mind-boggling numbers and crazy legalese. The prospectus has been submitted to the Securities and Exchange Commission.

However, the documents didn’t just have those boring details, there were some interesting points too. To quote a few, the prospectus revealed what everyone had heard from a long time, i.e., the ever strengthening and huge profit-making nature of Facebook. Everyone knows that it was a casual experiment by Mark Zuckerburg along with a few of his friends when he decided to open Facebook and the owner is seen to make about $3.7 billion profit annually today. The profit figure has taken a huge jump from $777 million in 2009. This sprint has been a result of the increasing profit-figure of Facebook only. The company made $122 million in 2009 and the figure has ballooned to $668 million last year. The figure, in cash, accounted to $3.9 billion at the end of 2011. Though, the company is still quite far behind its arch rival Google that has $45 million of cash deposited in its bank account.

The ever-increasing popularity of Facebook has made it a great platform for advertisers to expand their business. Facts reveal that company’s major portion of the revenue comes through ads. The member count of this social networking site has increased by 39 percent from 845 million users in 2009 to 608 million users in 2010. There has been a tremendous rise in the “likes” and status updates made by its users. The last quarter of 2011 saw an average of 2.7 billion “likes” and comments daily by its users.

However, Facebook’s revenue figures disappointed a few. For instance, Facebook revealed that on an average, it generates a revenue of $4.39 per user, which many people found “surprisingly low”. To talk about Google, they generate an average of $30 per user compiling to $38 billion, figures that make sense.

Facebook quoted that the company has the most active users from 6 countries, namely Brazil, Germany, India, Japan, Russia and South Korea. The expansion plans are being planned up for China as well where there are issues of censorship and certain objections put forward by the Chinese Government.

The IPO filed by Facebook gives an overview as to when they could possibly cross the mark of 1 million users. To go by the current speed, Facebook can cross the 1 million mark within the next 6 months or so.

But, the question arises-if these figures are great enough to fetch Facebook a loft IPO price for their shares. There were a few clues provided by the Wednesday’s IPO filing that reveals that the price could vary between the $35 to $40 range.