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Tuesday, May 8, 2012

postheadericon Facebook likely to be fourth richest float

Despite the success of the IPO almost certainly, Facebook needs to start making money in mobile advertising before

New York offices of brokers JP Morgan stole a flag - with the familiar blue and white logo Facebook - on Friday. Some spectators were horrified that he was flying at the same height as the American flag next to him. However, the Facebook status as an American icon was about to be cemented by his offer of securities market.

Mark Zuckerberg, founder and CEO and other senior managers, started her "tour" on Monday to convince institutional investors to buy shares before the JP Morgan flags flotation.The one of the subscribers and Goldman Sachs, Morgan Stanley as head of the IPO. It should not be too hard to sell. Hundreds of investors lined up in front of the Sheraton Hotel in New York yesterday to hear Mark Zuckerberg described the case of purchase of shares in the IPO of Facebook (IPO), which has been eagerly awaited since the months. Some 338m shares are selling at a price between $ 28 and $ 35 - which would bring between $ 9.4 billion (£ 5.8 billion) and $ 11.8bn in cash and may be valuable for the company to $ 100 000 million

This will make much more than in 2004 Google's IPO, which raised $ 1.66bn. Some think the company will raise the offer price even higher, beyond $ 38, that the IPO would be the fourth in history, surpassing Deutsche Telekom $ 13 billion in 1996. The final price is expected for May 17 Social networking is becoming light after years in which their finances and operations have been surrounded by speculation. It turns out that having a strong advertising model around know exactly what people are interested at any time -. Because users say 900m through their biographies themselves, updates and connections with others

the fourth quarter of 2011, which earned $ 302 million on revenue of $ 1.13bn, but earnings fell in the first quarter to 205 million U.S. spent more on marketing, although revenue rose by 45% year-over-year to $ 1.06bn.

The numbers are impressive: 125 trillion connections between those 900 million people (an average of 139 each). The button "Like" is pressed 2 billion times a day. More than half - 526 m - users log on each day. And $ 488 million to connect via your cell phone at least once a month. Among active users per day, 152 m in Europe and 129 million in the U.S. and Canada. The ads that generate most of your money can be very specific to age, interest or location - if, advertisers, Facebook is actually a black box to push their demands, but that does not sell data

a video broadcast to go to the exhibition gave a fascinating insight into the metrics of Facebook advertising. Worldwide, has $ 4.34 in ad revenue per user per year. In the U.S., the most fertile region, it becomes $ 9.51 per user, Europe generates $ 4.86, $ 1.79 in Asia and the rest of the world $ 1.42. In general, advertising generates 82% of their income, and the other 18% comes from payments, for example, their share of people spend to buy farm animals in games like Zynga Farmville (Zynga alone alone generates 15 % of total turnover)

Zuckerberg, 27, joined the table of 12 strong (in which he is president and CEO, and 10 year olds) by Mike Schroepfer, vice president of engineering, David Fischer in charge of marketing, and Sheryl Sandberg, chief operating officer. Sandberg, 42, received the highest remuneration in cash and stock, valued at just under $ 31 million last year, pack of 37 years, Schroepfer was worth $ 24.8 million, Zuckerberg more modest $ 1.7 million

Instagram The agreement has raised concerns about the company. "It makes it look like [Zuckerberg] was a kid in a candy store who wanted everything I wanted," said Francis Gaskins, president and publisher of research firm IPO Desktop. "They are moving in a field different, and I do not think I fully aware of subtleties in how to deal with institutional investors and how to run a business on a very cost effective. He talks about connecting people, but not only connect with people who will set the value of your business. "
The main threats

Facebook can not be external. Founded in the room with Zuckerberg while at Harvard University in 2004, the company has no real rivals outside of China. Google's attempts to move in social space with Google +, launched last summer, showed few signs of bumps in their place, or most importantly, user participation. And Zuckerberg is aware of the rapid rise and fall, he suffered in the first social networks such as Friends Reunited, Bebo and MySpace, which has focused on expanding its appeal and to build it in the fabric of the canvas through the "same" and similar systems.


However, there are two main threats: mobile and privacy. The global trend towards the use of mobile phones, smartphones and more importantly, is the only key. Facebook has no money in mobile advertising - but 40% of users to access in this way at least once a month. This is a deficiency that is determined to be filled, and quickly. In February, it was announced that he intended to develop strategies to address this situation. One challenge is that mobile advertising generates less income than on personal computers (because they are smaller phone screens, with fewer courses). But that number portability beyond those they use on the desktop - which is expected some time in 2013 - which could compensate


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