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What you need to know about Facebook before its debut



By Dian Vujovich

My, oh my, wouldn’t it be sweet to be one of the thousands who are either working for or have worked for Facebook and lucky enough to have some kind of stake in it.

But if that’s not the case and you happen to be one of the zillions of investors hoping to get their hot little mitts on some of the company’s IPO —it’s expected out within the next three or four months–read on.

According to Nicholas Carlson, an investment pro who provides commentary to The Daily Ticker, Google’s IPO in 2004 made many people rich but Facebook’s offering will kick things up a few notches: “It’s a monument to capitalism,” Carlson says. “A thousand millionaires overnight.”

And who says the economy isn’t looking up?

Being an educated investor is the best one can be no matter what future promises or opportunities look like. On that note, here are some of the basics behind this company that boasts nearly 845 million users—a figure that’s nearly three times America’s total population.

Data here is from hubspot.com after their review of Facebook’s S-1 Registration Statement filled with the SEC:

• At the end of 2011, Facebook had 3,200 employees—a 50% increase from 2010.

•Also as of December 2011, Facebook had 845 million monthly active users worldwide and 483 million daily active users worldwide. Mobile accounts made up half of Facebook’s user base at approximately 425 million active monthly users.

•There were 100 billion friend connections on Facebook as of the end of 2011. In Q4 of 2011, there were 2.7 billion likes and comments per day; 250 million photos uploaded every day; and more than 100 quadrillion bytes of photos and video were shared.

• Facebook is available in more than 70 different languages; has a penetration rate of greater than 80% in countries such as Chile, Turkey, and Venezuela; a 60% penetration rate in the United States and United Kingdom; in countries like Brazil, Germany, and India, penetration rates are estimated at 20-30%;. Japan, Russia, and South Korea have penetration rates of less than 15%; and Facebook is restricted in China resulting in a 0% penetration rate.

•Facebook has only been profitable for the last three years. But in 2011, they earned a profit of $1 billion—more than Google and Zynga when they IPO’d.

•In 2011, Facebook reported $3.7 billion in revenue, 88% more than the $1.97 billion they reported in 2010. But the percentage of growth year over year is shrinking. Annual revenue growth from 2009 to 2010 was 154% and 85% of revenues come from advertising.

•Marketing and sales expenses increased $243 million in 2011, or 132% compared to 2010. The increase was primarily due to payroll and benefits expense increases because of their 46% increase in headcount.

•In 2011, diluted pro forma per share profits were 43 cents a share and share-based compensation expense increased from $2 million in 2010 to $43 million in 2011. Facebook did not grant any stock options in 2011.

Knowing that, is Facebook a good bet? We’ll see, but, one has to begin to wonder if there isn’t a bubble about to burst somewhere in the not too distant future.


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