Federal Facebook Filing Finds Financial Flexibility

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The big social media news this week goes to Facebook. Officials from the world’s biggest social network released required financial documents Wednesday in preparation for the company’s initial public offering (IPO) in a few months, which will transition the company from a privately held firm to a publicly traded company. This is the first time Facebook’s customer and financial data have been made available, so potential investors and hangers-on had a lot of information to digest.

The Wall Street Journal delved into some of the highlights. Here’s part of their report, with a few interesting tidbits below the video.

The company hopes to raise as much as $10 billion when it begins selling shares this spring, said people familiar with the matter. Potential buyers got their first look at its financials Wednesday, which showed the company produced a $1 billion profit last year from $3.71 billion in revenues. The company derives 85% of those revenues from advertising, with the rest from social gaming and other fees.

Social gaming has become an increasingly important part of Facebook’s business. The company generated $557 million in revenue from partners such as Zynga who sell virtual goods last year.

Facebook’s revenue is still driven by online ads. The number of ads delivered on the site grew 42% and the average price per ad grew 18% over 2011 from 2010, according to the filing.

(By the way, the next video from WSJ on Facebook is three gurus salivating over the idea of kicking out Facebook founder Mark Zuckerberg and hiring somebody else to be CEO. There’s a reason I don’t often talk about Wall Street.)

It’s fascinating to me that so much money is being made on ads and social gaming. I can’t remember the last targeted Facebook ad I clicked, and while I do partake in the games here and there, I’ve never spent a dime on them. But with a billion dollars in profit, somebody’s clicking the heck out of the place.

Here’s my question: How many of us would have to buy Facebook stock to make them give us a decent Android app? Because we’ve been waiting a really long time for that.

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