Mediaboss Marketing

Facebook CEO Mark Zuckerberg, 27, delivers a keynote speech during a conference in September. (Kimihiro Hoshino, Agence France-Presse)

MENLO PARK, calif. — In a milestone for one of Silicon Valley's hottest companies, Facebook on Wednesday filed papers announcing a $5 billion initial public offering of stock in the world's biggest social-networking business.

The stated size of the offering is smaller than expected, after weeks of speculation by analysts and industry observers who predicted Facebook might seek up to $10 billion. But documents indicated the figure is preliminary; the company could revise the numbers as it prepares to begin selling stock this spring.

With the filing of its initial prospectus, stating that it intends to trade under the symbol FB, Facebook is officially launching Silicon Valley's most widely anticipated stock offering in recent years. For the Menlo Park, Calif., company and 27-year-old co-founder Mark Zuckerberg, it represents an official transition from wildly successful startup to corporate giant.

Industry sources expect the stock offering will set Facebook's overall value at $75 billion to $100 billion. The papers filed Wednesday do not specify a price or how many shares are being offered, although they indicate the company will have two classes of shares. The company is expected to release those numbers in coming weeks.

But the filing provides a glimpse into Facebook's operations and finances, which the privately held company has closely guarded until now. For example, the company disclosed it earned $1 billion in profit on $3.7 billion in revenue last year, after sales rose 88 percent from 2010.

Facebook first turned a profit in 2009, when it earned $229 million on $777 million in sales, according to the filing. And the company is not hurting for cash. At the end of 2011, Facebook had $3.9 billion in cash and marketable securities, up from $1.8 billion at the end of 2010.

Zuckerberg, who serves as chief executive, owns 28.2 percent of Facebook — a share that is significantly higher than previous reports have indicated.

Given the company's high profile and profitability, however, his compensation was relatively modest last year: It totaled $1.5 million, which includes the $692,679 it cost Facebook for Zuckerberg and his friends and family to fly on a chartered airplane. Facebook paid Zuckerberg $483,333 in salary last year and gave him a $220,500 bonus.

At the end of 2011, Facebook had 845 million users who accessed the site at least once a month and 483 million users who visited on a daily basis.

Zuckerberg highlighted that growth in a letter to potential investors, in which he vowed "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."

While there have been larger IPOs in the tech industry, an initial offering of $5 billion would still outrank any other Internet-based company's debut, including Google's initial offering in 2004 of nearly $1.7 billion. Morgan Stanley was listed as the lead underwriter of the stock offering, after beating out Goldman Sachs for the lucrative fees that go with the position. Goldman and several other firms will also participate, however.

The IPO is expected to create between 500 and 1,000 millionaires among Facebook employees with company stock.

See the original post here:
Social-networking giant Facebook files papers for $5 billion IPO this spring