Thanks to the terms of Goldman Sachs' $450 million investment in Facebook, the world is finally getting an accurate picture of the company's business operations.
During the first nine
months of 2010, Facebook earned $355 million in net income, reports Reuters, citing documents distributed this week by Goldman. Also
according to the document, Facebook generated $1.2 billion in revenue in the first nine months of 2010.
"Assuming the Reuters report is correct, Facebook would have at
least $500 million in net income for 2010, with an operating margin of up 30 to 40 percent," notes All Facebook.
"It just shows you that these business can
generate 30 percent to 40 percent, potentially, operating margins," Ryan Jacob, of the Jacob Internet Fund, tells Reuters. "They probably did at least $500 million in net income in 2010," Jacob
said.
Goldman was reportedly hand-delivering copies of the 101-page private placement memorandum for a $1.5 billion Facebook offering to customers this week.
The Wall Street Journal took the disclosure as "the clearest sign yet that [Facebook] is preparing to take
itself public sometime next year."
That's because the company said it plans to increase its number of shareholders above 500 this year, forcing it to go public by April 2012 or
disclose far more financial information.
"CEO and co-founder Mark Zuckerberg has made it clear numerous times that he is not interested in taking Facebook public, but he may have to
rethink that position," writes eWeek.
Meanwhile,
Facebook's fourth-quarter results weren't disclosed to Goldman's potential investors this week, but one source tells The Journal that Facebook likely had 2010 revenue of $1.9 billion to $2 billion.
Fueled by advertising dollars, analysts have said the company's revenue last year could be as high as $2 billion.
What should Facebook do? Whatever Zuckerberg thinks "is in the best
interests of Facebook's existing stakeholders and his own long-term vision," writes Forbes' Jeff
Bercovici.
Read the whole story at Reuters et al »