Facebook Aiming For $5bn IPO As It Prepares To Float

The main news story across the social media and tech world today is obviously the Facebook IPO. The world’s largest social network was originally thought to float for around $10bn, but Facebook have said it would seek to raise $5bn (£3.16bn, €3.8bn).

There was some interesting information to come from the documents provided by Facebook as it filed its intention to float with the Securities and Exchange Commission. Up until now, Facebook has been a private company, and as such was under no obligation to publish detailed accounts.

But as it moves towards an IPO it has been revealed that Facebook’s net income in 2011 rose 65% to $1bn, off revenues of $3.71bn. It was also disclosed that founder Mark Zuckerberg owns 28.4% of Facebook, and also that the network now has 845 million monthly users and 443 million daily users.

A letter from Mark Zuckerberg explained where he saw the company going, and reminded potential investors of just what exactly they were buying into:

“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… We think it’s important that everyone who invests in Facebook understands what this mission means to us, how we make decisions and why we do the things we do.”

If Facebook reaches it $5bn target – which is pretty much a given – it would be the biggest IPO for an internet company since Google and its early backers raised $1.67bn in 2004. However, while acknowledging Facebook’s achievements thus far, Kathleen Smith – principal of IPO at investment advisory firm Renaissance Capital – does wonder where the giant social network goes from here. She said Facebook’s numbers were “very impressive,” but pondered “What new areas of business is it expecting to pursue beyond display ads?”

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