Facebook files for IPO

Jennifer Scott News
2 Feb, 2012

Zuckerberg and co hope to raise $5 billion when the social network’s shares go on sale to the public.

Facebook last night announced it was filing an Initial Public Offering (IPO) to float the company on the stock market.

The filing was given to the Securities and Exchange Commission after the markets closed in the US. It showed the world’s largest social network was looking to raise $5 billion (£3.1 billion) from sales of its shares to the public.

The number would make it the largest sale of an internet company so far, but still came in at half the $10 billion figure analysts expected Facebook to file for.

Facebook revealed impressive revenues of $3.1 billion for 2011, with a $1 billion net profit for the social network. The break-down of revenues since 2008 was unveiled as well, showing a comparatively tiny figure of $153 million just five years ago.

The power of gaming on Facebook was also made very clear by the company, which admitted 12 per cent of its revenues last year came from Farmville-makers Zynga.

Shortly after the announcement, a letter was published from Facebook’s chief executive (CEO) Mark Zuckerberg, claiming his website was “not originally created” as a business but as a “social mission.”

However, he claimed the world was now at a “tipping point” in technology and Facebook could play a large part in offering the services to “transform many of our core institutions and industries.”

“Simply put: we don’t build services to make money, we make money to build services,” wrote Zuckerberg.

Despite being the creator of arguably the most famous website in the world, the filing revealed Zuckerberg took a salary of just $500,000, with a bonus of $220,500 in the first half of last year.

User figures for the end of 2011 came to 845 million active users, up 39 per cent from 2010.

Although the filing was made today, the flotation of Facebook is not expected until May 2012.

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