Facebook has finally revealed its intentions to go public today. Its seeking to raise $5 billion in funding through a massive $100 billion initial public offering. At that level, the company would trade at 25 times 2011 revenue, compared with about 5 times for Google, whose market value has jumped eight-fold since its IPO.
Revenue from Zynga games contribute 12% of Facebook’s bottom line. Facebook said it made $3.71 billion last year, so almost $500 million of that came from Zynga, which includes both users buying virtual goods and services within the games via Facebook Payments as well as “direct advertising” that Zynga bought.
One of Facebook’s largest ad deals was for Transformers: Dark of the Moon last summer, paid for by Paramount Pictures. Facebook said the studio was able to reach 65 million users in a single day.
Like the network itself, Facebook’s revenue is also going international. U.S.-based companies contributed to 62% of the company’s bottom line in 2010, but that figure shrunk to 56% in 2011. Facebook says it’s because the number of international users is growing faster, and due to Facebook opening more sales offices and payment methods abroad.
I love Mark Zuckerberg’s public statement regarding Facebook’s “hacker culture”, and the sort of values he has instilled in his company. These are exactly the kind of values high growth tech companies need to hold onto:
Focus on Impact
If we want to have the biggest impact, the best way to do this is to make sure we always focus on solving the most important problems. It sounds simple, but we think most companies do this poorly and waste a lot of time. We expect everyone at Facebook to be good at finding the biggest problems to work on.
Move Fast
Moving fast enables us to build more things and learn faster. However, as most companies grow, they slow down too much because they’re more afraid of making mistakes than they are of losing opportunities by moving too slowly. We have a saying: “Move fast and break things.” The idea is that if you never break anything, you’re probably not moving fast enough.
Be Bold
Building great things means taking risks. This can be scary and prevents most companies from doing the bold things they should. However, in a world that’s changing so quickly, you’re guaranteed to fail if you don’t take any risks. We have another saying: “The riskiest thing is to take no risks.” We encourage everyone to make bold decisions, even if that means being wrong some of the time.
Be Open
We believe that a more open world is a better world because people with more information can make better decisions and have a greater impact. That goes for running our company as well. We work hard to make sure everyone at Facebook has access to as much information as possible about every part of the company so they can make the best decisions and have the greatest impact.
Build Social Value
Once again, Facebook exists to make the world more open and connected, and not just to build a company. We expect everyone at Facebook to focus every day on how to build real value for the world in everything they do.
Mark ends the letter of with an inspirational thank you:
Thanks for taking the time to read this letter. We believe that we have an opportunity to have an important impact on the world and build a lasting company in the process. I look forward to building something great together.
