Facebook IPO could value company at $100 billion

Social giant announces initial public offering, estimates suggest it could quadruple Google's value at the time of its own IPO; games "most successful app."

It's been clear for some time that Facebook is big, but industry watchers are about to get an idea of just how big. The social network today announced its initial public offering, and The Wall Street Journal reports the IPO could see the company valued at as much as $100 billion.

Most expensive book ever.

That would make the company the biggest tech IPO of all time, easily topping the 2004 Google IPO, which saw the search giant valued at $23 billion, raising an extra $1.9 billion in the process. The Facebook IPO is expected to raise between $5 billion and $10 billion for the social network.

Facebook's long-awaited publicly traded debut follows that of another online specialist, as social game publisher Zynga had its own IPO late last year. That company--which relies heavily on its Facebook games--disappointed industry watchers, debuting at $10 per share and finishing its first day beneath that level. However, Zynga shares have since recovered, finishing today's trading at $10.60.

In its filing with the SEC, Facebook acknowledged the important role that social games play in its business model, saying that they "are currently the most successful apps" on the network. The company also indicated that it derived $557 million in revenue from the sale of virtual goods in 2011. These revenues are derived from its Facebook Payments monetary system, which all game developers must use when selling in-game virtual goods.

For 2011, Facebook reported $1 billion in profit off $3.71 billion in revenues. The exact date of its IPO, the number of shares, and the price at which they will be set have yet to be determined.

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Discussion

15 comments
freestyler_85
freestyler_85

You ever wonder how something that provides you with a service free of charge is worth so much? Where does all that revenue come from? I'll tell you why...Facebook 's only real purpose is to farm data ..and not just any data but personal data. If a person approached you on the street and said , "give me your name, city you live, a picture to identify you, who your significant other is and whats your fav movie".. you'd probably tell that person off. Well if you receive an invitation e-mail from Facebook asking you to join and give them all that same info, you'd completely put your trust in them just because its got an cute, innocent name like Facebook.. and of course, all your buddies are doin it too and you ain't "cool" unless you do as they do..

VilandasUK
VilandasUK

:| What is this article doing at GameSpot ??

Evenios
Evenios

thats honestly insane how much facebook is worth or will be worth thats only because pretty much everyone brother uses it now. with myspace it was mostly used by younger people but with facebook it seems everyone's brother is getting on it. Honestly i really hate facebook it just further enhances the shallowness of people today look at me look at my pictures look at all of my updates, rarely does anyone on my list ever actually really write me. i think the age of one on one personal commication is sort of dying for shallow group comments like facebook and twitter. :-(

XanderZane
XanderZane

@UnwantedSpam And this is on Gamespot why? *********************************************************** I was wondering the same thing. This should be on Newsweek's website. Facebook does have games on their site, but when is the last time Gamespot reviewed one of them?

XanderZane
XanderZane

@jamyskis As much as I like Facebook for the way it allows me to keep in touch with all my friends abroad in one fell swoop, I'm very sceptical about Facebook's ability to remain a viable enterprise. Businesses are interested in it because it gives access to lots of people. Lots of people use it because it is free. The problem with free stuff is that when something better comes along that is free, Facebook will be old news, and without the people, businesses will also lose interest. *************************************************************** That's is possible. I don't see that happening anytime soon. Japan released their own social network (I can't remember the name of it) and it pretty much bombed. Still, Yahoo was huge before Google stole it's thunder. Now we have Bing, which still isn't as good as Google. McDonald's was huge in the 70's and 80's, but now Burger King, Jack in the Box, Johnny Rockets & Wendy's have taken a lot of their customers away from them. McDonald's have actually closed 100's of chains worldwide over the last 10yrs. Facebook isn't going anywhere and I would love to buy some of their shares, but the public won't be able to get any immediately. Big businesses, employees and associated companies will have first crack at those shares. If it gets to $100 billion, I would sell it if I was Zuckerman. If you are 28yrs old and a billionaire, why would you want to work the rest of your life?

Wavory
Wavory

One thing is for sure about those people: they dont know what to do with all that money.

Darnasian
Darnasian

@King-gamer I would be happy if they give me even 0.1% of their money...

jamyskis
jamyskis

As much as I like Facebook for the way it allows me to keep in touch with all my friends abroad in one fell swoop, I'm very sceptical about Facebook's ability to remain a viable enterprise. Businesses are interested in it because it gives access to lots of people. Lots of people use it because it is free. The problem with free stuff is that when something better comes along that is free, Facebook will be old news, and without the people, businesses will also lose interest.

King-gamer
King-gamer

Can facebook donate me even 1% of their money? That would be awesome. :P

X_Colbert_X
X_Colbert_X

Here's the difference between Google and Facebook when it comes to investing: Google is an extremely viable company with diversity in its products and near-limitless applications for said products. Facebook is reliant entirely on one single product that is dependent upon constant growth if it is to be successful in the long term--growth that has been slowing significantly for some time now. When Google held its IPO, it had room to expand (and it still does). Facebook's IPO comes at a time when the service is about to hit its limit.

nurnberg
nurnberg

These numbers are insane.

Yulaw2000
Yulaw2000

Facebook is something to be avoided.