Facebook's financials revealed in leak
 

January 7, 2011 - 9:48AM

Facebook earned $US355 million in net income in the first nine months of 2010 on revenue of $US1.2 billion, according to documents that Goldman Sachs is providing to clients.

Goldman began hand-delivering copies of the 101-page private placement memorandum for the Facebook offering to its wealthy customers a little after lunchtime Thursday in New York, according to a person who received a copy.

The Goldman customer said he received a separate six-page financial statement containing information on the social networking firm.

The document provides some of the most detailed financial information to come to light about Facebook, which Goldman recently valued at $US50 billion in a separate, $US450 million funding.

The financial statements were not audited and offered little detail about how Facebook generates it revenue, said the source, who did not want to be identified because he had signed a non-disclosure agreement.

Goldman customers seeking to buy shares in the privately held Facebook will invest money in a newly formed Delaware entity called FBDC Investors LP, according to the source. Corporate records show that FBDC Investors was incorporated in Delaware on January 5.

Goldman customers have until Friday, US time to commit to investing in the new entity and until next Tuesday to wire money to the Wall Street firm.

Goldman, which is investing $US450 million of its own capital in Facebook, is raising at least $US1.5 billion from its wealthy customers through the limited-time offering.

Investors are increasingly eager to buy shares of Facebook and other fast-growing internet social networking companies on private exchanges.

source: http://www.smh.com.au/technology/tec...107-19hyt.html

unless FB goes public, there is going to be a lot of pissed off investors in a few years...




.

'Leak' financials to lure in investors. Blow up the stocks, make money and watch it crashhhhhhh......booom.

i think that 50billion valuation is a bit over the top

:thumbsup

I'd have to agree... even accounting for their reach, industry momentum towards online advertising, and everything else... $50B is... well... over valued for a company that does $3XXM in profit a year, LOL

Company is still growing and is just scratching the surface of what they can do with that much traffic.

Facebook is fucking annoying

:2 cents: ...

So, Goldman Sachs is involved in a secret, private investment scheme? Sounds legit to me.

there's a reason fb won't go public- they would have to clean up their #s. when i worked for a social networking site way back when and we were preparing for our ipo, we were required to clean out all fake/duplicate/bad/dead profiles, that resulted in ~35% dropin profiles.

fb is no different. 500m peeps on fb? right.

Still 330m with your 35% chop. Puts the net income at about $1/year per member which sounds tiny.

i completely agree. but they are capitalizing on the 500m # and the neg publicity from a clean up is not something they want. it's funny how private a social site prefers to be eh.

Why is their over head so fucking high for an internet company what are they using gold plated servers encrusted in diamonds?? 335 mil off of 1.2 billion wtf?

Hmmm 355 million for the biggest site. I guess that it is right. Thought it would be more.

It's a free site with no main product being sold that makes a net income of 355 million in 9 months.

That's pimp...

And you are fucking stupid.

BTW, do you have a license to use celebrity pics on your site?

It will be nice to email some people to take a look.

I'm sure WENN and others will get back to you soon.

Great way to get attention, you stupid asshole.

We all saw how fast MySpace came and went. There is nothing saying the same couldn't happen to Facebook. Can someone tell me how the fuck it is valued at $50 billion?

Hell I don't know how it works in the mainstream but if someone in adult is selling a site it's usually like 6 months profits or 12 at the most, but something making $473 million in 12 months can be worth $50 billion? wow

Basically it's 1999 all over again and you're absolutely correct.

I thought it was totally crap, but I must say we've been doing really well buying advertising on FB lately, the only thing making us money these days (mainstream stuff). Still think 50B is waaaay too much though, but I can see why it's worth a few billion at least.

hmm, growing ? I think they have reached the top , also around 70% of the FB users are out of the US , many FB users thus are poor peole with no means of buying online stuff , they will not convert well for people buying ads on fb , they might click an ad but will not go on to buy stuff ..

FB is going to be dead in 4 to 5 years .. up to the next big hype :2 cents:

On the money :thumbsup

A bit is an understatement. Giving them the best poss let's say they had a kick ass Q4 and closed out at 2 billion top line for the year.. that's alot of fucking money but the margins are thin and there is no way they can maintain their rate of growth, and Goldman's going to put a valuation at a 25 times multiple?

Whenever people get really into it about facebook someone always says, "Zuckerberg's barely scratched the surface of Facebook's earning potential"- and while that may be true I have to ask, what the fuck is he waiting for?

He's looking for an exit. I think he knows there's a delicate balance when it comes to monetizing social networking traffic, if you squeeze your surfers to hard they'll label you a pariah and abandon ship. He doesn't want to rock the boat, facebook can't hit a plateau. His focus is on sewing the seeds, building the story, and chumming the waters with "leaks" like these.

Whomever buys the company will have the public perception of the hand off being their game to lose, but the reality might be when a community has reached it's peak there's nowhere to go but down.

If I had 50 billion to invest, I would rather buy google, not facebook :)

I agree, just watched social network last night and if nothing else it will inspire you to kick ass at what you do best. Create.

But as far as facebook I already see them shooting themselves in the foot. Like the movie said it had cool factor but now it's turning commercial and that will turn your users faster then you can get a paycheck. Just look at digg.

$50 Billion is just insane.

They will crash so hard once a P2P solution comes around...

Facebook is the biggest thing to happen since google
It is going no where. Once they work out how to really monitize it will be over.

not sure about 50billion yet but its the biggest site on the internet for a reason

I agree with you. They are not just a social networking site they are in the running with google to replace the operating system. That is the big play

iv mentioned this before...

but to put into perspective how inflated this 50 billion valuation is...

boeing has a market cap of 47 billion...

these fools are trying to convince us that fb is worth more then one of the largest industrial (and military i might add) power houses in the world?

right.

the only thing that interests me in this whole goldman facebook story is how hard cnbc has been pushing facebook as of late, further affirming that goldman has his cock so deep down general electrics throat that its extruding out of ge's anus.

Like most things talked about on the Internet it's inflated beyond all sensibility. If someone was willing to spend $50 billion it would be sold in a heart beat.

Still proud to say never have and never will use Facebook. :glugglug

The lack of foresight in regards to Facebook from persons here shows how stagnant we have become as an industry.

When Facebook releases the e-commerce aspect of its plan, a $50 Billion valuation will be a drop in the bucket compared to what it will be valued at then.

After that, when Zuckerberg opens up to the global sports betting and gambling industry, due to the site's natural ability to segment the user base by age, he will make even more money.

Even if those two minor aspects for some reason do not perform as well as planned, all he needs to do is get a fraction of the social networking traffic from QQ in China or Orkut in India and he will multiply the company's worth several times over at the very least.

Add VR aspects and even more complex media delivery mechanisms to Facebook and forget about it, Facebook will be around for our grandchildren's children.

That may be true, but the prospective dollars generated by any additional monetization efforts are an unknown quantity. Facebook may unleash some new segment or service that becomes a game changer, but we don't know that. They were supposed to unleash a "gmail killer" a few months ago but that didn't really happen.

It's just as likely that in the next few years another social networking product will come into play that will eclipse facebook. Facebook is huge, but when it comes to things like innovation, diversification, proprietary technology, and most importantly profitability the fact is Facebook ≠ Google.

Remember when Google was *only* a search company and they didn't have huge income?

Facebook is currently *only* a social network that doesn't have huge income.

Facebook may very well have the next big thing up its sleeve and needs the money to it. If there is any Internet company besides Google that can jump into something else in a huge way, it is Facebook, now the #1 visited site in the world.

Things are never what they appear to be, and GS rarely loses money. They know something we do not know ... GS thrives on insider information, which is why they thrived during the financial crisis.

Or they could be making a huge, very public mistake.

Time will tell and that is half the thrill of it all.

On the flip side, GS' money that was injected may just be to get the IPO.

GS is driving the hype, and will get the IPO biz for it. Its IPO fees will eclipse the money they and their prized special investors injected into the company.

It may end up being that GS and it's favored investors are the only ones to really make money.

When it comes to GS, that would not be surprising.

At the same time, if played right, Facebook can do a lot with the infused cash. I guess we'll find out if Zuck is a two trick pony.

It will be interesting to watch.

The "gmail killer" didn't happen because they realized that there is a drastic shift occurring in terms of email providers. Email is not dead, but it's getting up there in age.

If they had gone ahead with the "gmail killer", it would have flopped. Facebook's reactivity and their ability to sense failure (and kill/modify a project before they make a mistake releasing it) is what makes Facebook a game changer within itself.

It will be very difficult for another social networking success like Facebook to rise up in the coming decade. Take a look at every major site. Do you see that "Like/recommend button"? Top Internet media companies LOVE FaceBook and its integration aspects have made them almost reliant upon Facebook's social networking platform.

Until persons stop seeing Facebook as just another website and begin seeing that Zuckerberg is thinking on a platform level, many will continue to be surprised at Facebook's success and continue to underestimate the scope of its reach.

facebook sucks

Yeah, that's why it's shutting down on March 15

:1orglaugh:1orglaugh

I know...I know...

Surfers are fickle and social networking profiles don't seem to have the same longevity as say something like email addresses (how many people still use yahoo?). Millions of users flipped from Myspace to Facebook, and from Friendster to Myspace before that. In the online community space surfers will go to wherever the action is and if someone comes out with a network that in some way provides an edge over what they currently are using history has shown they won't hesitate to drop it like it's hot.

The same could be said for search engines. How many people went from gopher to alta vista, alta vista to lykos, etc. Google came and Google changed the game. Facebook is in a very strong position to do the same, but I think they have a few things working against them.

Facebook doesn't have the same brand loyalty as say a company like Google does, or even better Apple. The majority of facebook users don't seem to be huge champions of the brand. The company already doesn't rate high on the trust scale with it's audience and I don't get the impression users really feel "invested" in the company's success.

I guess I just haven't seen enough evidence to convince me Facebook will grow beyond the social networking box. I agree the Like button has helped futher integrate Facebook with many different aspects of the web, their smart phone apps are decent and their integration with other apps is a good move, but I dont think facebook offers anything that users feel to be irreplaceable by another competitor in the space.

thats all you can make with alexa rank of 2, what are we all doing here?

:1orglaugh:1orglaugh :thumbsup

Free might not be as profitable as some think. Well not for everyone.

I like the replies starting on "When".

Maybe they do have something in mind that will change the world, or maybe just another free site or app to put adverts on.

It's worth 50 billion cocks, they will pump it, take money from people and run away

What you're saying is logical, if you look at things strictly in regards to satiating one's surfers merely on a company's main site. However, Zuckerberg and crew are designing according to a developer perspective (ie. Make the platform easy to integrate into (and beneficial for) other major sites). As a result internet users, despite any misgivings about the brand, will have a greater tendency to use it because the FB login and other related services are becoming relatively ubiquitous.

Notice that twitter is following a similar developmental process.

To give some comparison in terms of successful implementation of FB's (and twitter's) platform integration, look at OpenID's relative lack of success in terms of penetrating the login interfaces of major media sites.

What I'm pointing out is that Facebook is not just a site. They are a platform. For those who don't want to use the Facebook.com page, that is fine. But any developer here would be wise to take note of the API and other developer tools that Facebook is offering.

Many of the mainstream sites that I visit nowadays pick up either my FB or Twitter login automatically. Yes, I know that I'm pretty much being tracked as to my whereabouts online, but I'm fascinated with how the platform is being embraced by other developers and designers.

In our industry it might not be that easy to integrate their platform as some persons don't want their FB friends and family knowing that they automatically logged into Playboy.com or are sharing/liking an article or picture from that site. However, there are many opportunities present that could be very beneficial to certain sites within our industry (I've noticed that FB's Playboy Party app is live now and is picking up in popularity). We just have to be creative.

You never know...we just might eventually end up with Facebook TV, among other things...

I see what you're saying. I understand and acknowledge that Facebook's integration with other major media sites as well as mobile apps is a strength and shows they are expanding their reach and making efforts to further solidify & integrate their brand. If facebook was able to offer a deeper level of integration based on a proprietary technology, or if they were able to forge exclusive relationships with other titans to keep competitors out, that could be something that would give them that edge... but as you pointed with Twitter- other social media sites are able to follow, building off FB's the lead and doing the same.

My issue with the facebook valuation is it seems to be largely based on what might be other than what is now. Facebook has amazing potential but until they execute on some of their plans to make themselves more profitable and less disposable (by doing things like further diversifying their services and building consumer confidence) it's all conjecture.

I just feel, based on the information available to me, that a good portion of the valuation seems to be riding on what I perceive to be an unknown quantity. We have to also put things into perspective that this is a strategically leaked valuation, not an official release by Goldman Sachs for consumption of the general public. I believe this is a very calculated move as way to float a number to the masses and still minimize any risk to reputation.

do you even read anything?

their net was 355 mil in 9 months.

how is that not profitable?

what is wrong with you?

No fucking way_that they are worth 50b.

this is all just the beginning. when did FB launch? 2005? 2006? now compare googles numbers 5 years after their start

yes their valuation is out of whack, but it maybe it will put an end to the idea that certain types of sites are unable to make a profit.

or maybe it wont, because for most if they can't conceptualize it, it doesn't exist.

interesting and a good point by shellycrash!