As you may have heard, Facebook plans to become a public limited company (plc) and float on the stockmarket. It hopes that this will raise around the sum of $5 billion USD (this is only about half what most people thought it would try to raise) in finance for the business, a colossal amount!
Thanks to the flotation it is estimated that around 30% (roughly 1,000 people) of the companies employees will become millionaires! That said, Mark Zuckerberg is reducing his annual salary to just $1 as of January next year. Why? Because he will have shares estimated at the value of around $100 billion!
Anyway, due to Facebook wanting to become a plc, it needed to release more detailed financial data than it ever had before, into the public domain. This means that we now know much more about this previously rather secretive internet giant, than ever before!
Finances
Thanks to its choice to become a plc, we now know that Facebook makes 85% of its income from advertising. Furthermore we know that last year it made almost $4 billion USD! Out of this, it turned an impressive 25% into profit, bringing it in $1 billion (supposedly exactly) in net profit.
It is now possible to value to company as a whole, and it is thought to be worth $100 billion USD. To compare that to other industry giants, Amazon is valued around the same amount, eBay is values at about half that figure, and Google is thought to be worth double that.
Ownership
Facebook will still be owned and controlled largely by Mark Zuckerberg. He currently owns 28.4% of Facebook and has a majority in terms of voting rights with over 50% of votes. Basically Zuckerberg owns Facebook still, and he seems to want to stay in the driving seat for a while yet!
Users
We now also know that Facebook have around 845 million active users around the world, of whom, around 450 million visit the site very regularly – that is a crazy amount!
The Future?
Facebook would be worth nothing without its users. Some people say that its users are not Facebook’s customers, but in fact the networks products. If people get bored or move on, the site will die.
If you were buying shares in an internet based business, Google would probably be a much safer bet than Facebook, as its future looks much more certain. Facebook may pay massive dividends to investors in the future, or it may go into decline and cost investors a collective $5 billion!
Friends Reunited was once great, now it stands in Facebook’s massive shadow, as does Myspace, Bebo, Foursquare and many other social media sites. All these sites how now been superseded by Facebook, the question is, will Google Plus or something else dwarf Facebook? Personally I believe that in 10 years, there will be something bigger, but we will just have to wait and see 
jonny hankins (10)
Aasma @ MLM Software (5)
Jean @ Used Tires (3)
Shane Ryans (3)
Christopher Roberts 
Jonny Hankins 
Ron Fletcher 
Alan Tay 
Proudly powered by WordPress
Wow, 4 billion dollars from advertising. I had no idea they were rolling that kind of dough but I guess its not surprising given they’re often touted as being Google’s number one challenger in recent years.
-Jean
Why not check out my recent post at Things to remember before buying Used Tires?
I know, it does seem like an awful lot Jean!
The only thing that Facebook has to sell is access to its users, and given the number of users and price quoted this means that each is worth about 120 to 130 dollars each. New subscriptions are dropping however, no surprise when you see how many people use Facebook already, so I think Mr Zuckerberg is selling out at a good time. How can a user be worth over $100? Their time on the site is the only value because it is the medium for publicity, this is why Facebook are trying at all costs to get its users to stay logged in for longer.
I never thought of it like that Jonny, very interesting take. I would agree, are users really worth $100 each?
Only in terms of targeted marketing. I saw someone this week describe Facebook as the biggest shopping mal on Earth, and that is its only value.
85% is made from Facebook ads and that is going to keep increasing in popularity as Google Adwords becomes more expensive and less effect in many peoples opinions. It will be interesting to see how everything turns out.
Why not check out my recent post at How to Create a Following on Google Plus?
Interesting that you think people will move away from Google. To be honest, I think that Google is still in the stronger position, as everyone uses search, but everyone doesn’t use social media. How many people do you here have closed their Facebook accounts? I know a few. How many people have stopped using Google? I don’t know any – there probably are some, but much fewer.
Thanks for the comment Caleb, welcome to the blog
Christopher – Admin Team
My mind goes wow after reading about 4 billion dollars worth of advertising revenue. I expected only millions. But even with that earnings, I still feel that Google will be the number 1 in terms of advertising revenue.
It is a lot more than most people expected Feye, as Jonny said, can it really value each of its users at over $100?
Thanks for the comment, welcome to Technology Bloggers
Christopher – Admin Team
The rate at which this company is growing is quite overwhelming. All companies which are of nearly the same value have existed for atleast double the duration. From a college project to a Billion dollar enterprise, the story still continues.
Indeed it does…
It is amazing how much Facebook grew in such a little time of existance , and all this due to the users.I dont believe that something can dwarf FB as you mentioned at the end of your article , not even Google plus, at least not now or even in 10 years unless it has to offer something that FB cant.
Facebook has grown fast Peter, but what makes you think that it is currently unbeatable? As I mentioned in my article, people thought that about Myspace and Friends Reunited too.
Thanks for taking the time to comment, welcome to the blog
Christopher – Admin Team
I am surprised that they bring in that much money. Pretty impressive. I still think I will stay away from this stock unless they let the average user buy in at the same time the institutions buy in on IPO day.
Why not check out my recent post at Intel Zooming Back to Dominance with Ultrabooks?
Facebook is still obviously a HUGE part of our present culture, but I still wonder if it hasn’t already hit its’ peak and could now potentially go the route of Myspace. I like Facebook, but what I don’t like is how much it’s changing. I watched one of the most interesting Mark Zuckerberg profiles the other day, on one of the US’ major news networks, and they mentioned how he likes taking 3 steps forward and if he has to take 1 or 2 steps back due to user dislike, then he does. Like when people were in an uproar over FB sharing information like what you buy on sites, it’s interesting but I have to admit I’m getting a bit irritated they keep modifying things. I know they’re trying to make it ‘better,’ but some stuff I don’t like, like Timeline. It seemed fun at first, but now that I’ve really played with it I don’t really like it.
Pingback: Facebook and the Inevitable End | Technology Bloggers
But Facebook stated that with all the growth that have had, there will be a time that growth will slow down. At least, that’s what I have read from their IPO guidelines (There is a part of any company’s filing of the IPO that requires them to state some reasons why they think their company might crash down.) That means the money that they will have on the filing will be used for research on what Facebook can do to innovate and make users stay.
I never knew that companies had to disclose that sort of info – how interesting!
Thanks for the comment Vincent, welcome to the blog
Christopher – Admin Team