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The world's most used website goes public

From a sleepless Harvard University dorm room Mark Zuckerberg sewed the seeds of an empire.

That empire would grow into the world's most used website -- claiming over 845 million unique users a month.  That empire is Facebook.

Today Facebook announced what many had long awaited -- an initial public stock offering.  To be fair, Facebook is just testing the waters.  It's looking to sell around $5B USD of its private shares, from a pool valued at between $85-100B USD.  The long rumored IPO is finally official.

The modest start wouldn't even pull in as much as Facebook FarmVille gamemaker Zynga Inc. who went public in December to the tune of $7B USD ($10 USD/share).  Experts are hoping for a better IPO, this time around.  Zynga's big haul was still considered a disappointment give that it was much lower than the company's original target of $14B USD ($17.20 USD/share).

Facebook will use the ticker symbol FB.

Like many tech moguls, CEO Mark Zuckerberg accepts a low salary -- $500,000 USD per year.  Soon (as of 2013) he will only be paid $1 USD per year.  But the 27-year-old is estimated to have $17.5B USD in Facebook equity.

Facebook launched in 2004.  At the time MySpace was just starting to heat up and people were starting to migrate from "blogs" to "social networks".

Within a couple years Facebook had begun to pick up speed too.  Now the race was on.  But it was a short-lived race.  Facebook's clean layout and college-savvy theme quickly won over users, versus the cluttered mess than was MySpace.

In 2009 Facebook passed a critical milestone, posting its first profit of $229M USD on a revenue of $777M USD.  It has remained profitable ever since, in 2011 earning $1B USD on revenue of $3.7B USD.

Facebook makes much of its money off a combination of data-mining and advertising.  It also makes a growing amount of revenue off of "Facebook Credits" a digital currency for online apps and games.  Facebook gives developers like Zynga 70 percent of the sales proceeds, and it pockets the remaining 30 percent.  Zynga -- by far the biggest Facebook app maker -- chipped in 12 percent of Facebook's total 2011 revenue.

Like many mega-successes of the tech world -- e.g. Apple, Inc. (AAPL) and Microsoft Corp. (MSFT) -- Facebook suffered under accusations that Mr. Zuckerberg "stole" much of its early technology and ideas, as depicted in the fictionalized accounting, "The Social Network".  Facebook also has been forced on the constant defensive over a grow slew of complaints [1][2][3][4] [5][6][7] that it does not respect users' privacy or contributes to societal ills.

However, these concerns have done little to slow the site's growth.  There are 6.84b people on Earth, according to recent estimates.  That means that almost one in eight people on the planet today uses Facebook.

Facebook joins a host of other internet IPOs in the last year -- Pandora Media Inc. (P) ($100M USD IPO; $1.8B USD valuation), Groupon Inc. (GRPN) ($700M USD IPO; $12.7B USD valuation), LinkedIn Corp. (LNKD) ($352.8M USD IPO; $4.2B USD valuation), Zillow Inc. (Z) ($6.92M USD IPO; $539M USD valuation), and Angie's List Inc. (ANGI) ($130M USD IPO; $801.7M USD valuation).

Facebook now has its first legitimate competitor in some time -- Google Inc.'s (GOOGnew social network Google+.  Google+ is more respectful of privacy, in some ways.  The Google homepage is the world's second most used website.

Mr. Zuckerberg may bank off of Facebook IPOs, but he has already pledged to donate all of his money by the time he dies, inspired by his tech mentor and close friend, Microsoft founder and ex-CEO Bill Gates.

Source: CNN





“We do believe we have a moral responsibility to keep porn off the iPhone.” -- Steve Jobs







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