Facebook's leaked financials show possible $1B profit in '11
Goldman Sachs' not-so-secretive document spills beans on site
Computerworld - Facebook reportedly generated $1.2 billion in revenue in the first nine months of 2010, according to a document being distributed by Goldman Sachs.
What are reportedly Facebook's financials began leaking out Friday thanks to a not-very-secretive 101-page document that Goldman Sachs is sending out to potential Facebook investors, according to Reuters. Goldman Sachs, which earlier this week invested $450 million in Facebook and valued the social networking company at $50 billion, is providing its wealthiest customers with the most detailed information about Facebook's financials to hit the street yet.
Citing an unnamed source who received the document, Reuters is reporting that Facebook earned $355 million in net income in the first nine months of 2010. It also noted that the financial statements being handed out have not been audited and do not specify how Facebook is pulling in its revenue.
Businessweek is reporting that if Facebook can maintain its growth and margins, the company could realistically pull in $1 billion in profit in 2011.
Facebook declined to comment for this story.
"We're finally seeing some numbers on Facebook's revenue and profitability and the news is mostly good," said Dan Olds, an analyst with The Gabriel Consulting Group. "The company has solid revenues north of a billion and profit margins of anywhere from 25% to 35%. These are great numbers, but not necessarily high enough to support a $50 billion valuation."
To financially get where Goldman Sachs thinks Facebook can go, the company won't be able to just stay the course.
"The only way Facebook at $50 billion looks like a good investment is if you believe that the company is going to continue to grow revenue and profits at a huge clip well into the future," added Olds.
News of Facebook's financials surfaced just one day after reports hit that the social networking company is on the cusp of gaining 500 shareholders, an invisible line enforced by the U.S. Securities and Exchange Commission (SEC) that will force Facebook to disclose its financials even though it's not a publicly traded company.
Discussion of the site's finances was widespread this week, even turning up in a segment on The Daily Show, where host Jon Stewart lampooned Facebook's desire to keep its information secret.
|The Daily Show With Jon Stewart||Mon - Thurs 11p / 10c|
|The Anti-Social Network|
The Wall Street Journal reported yesterday that Mark Zuckerberg, CEO and co-founder of Facebook, is preparing to launch an initial public offering in 2012. That echoes statements made last September by Facebook board member, venture capitalist and PayPal co-founder Peter Thiel that Facebook was eyeing an IPO in late 2012.
News about Facebook's IPO prospects follow widespread speculation in recent days that another social networking company, LinkedIn, is working on an IPO of its own and could beat social networking heavyweights like Facebook and Twitter to the IPO gate.
Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin or subscribe to Sharon's RSS feed . Her e-mail address is email@example.com.
- Facebook launches redesign with a bit of the old, a bit of the new
- Facebook eyes solar-powered drone company
- Facebook coughs up $19B for WhatsApp's younger users
- Facebook buying WhatsApp for $16 billion
- Facebook's birthday present: A look back at your social life
- At 10, Facebook strives not to be your granny's social network
- Facebook sees apps in its future ... lots of apps
- Facebook hijacks Trending feature from rival Twitter
- Facebook to kill off one kind of ad some users hated
- Facebook uses a seasoned Chef to keep servers simmering
Read more about Web Apps in Computerworld's Web Apps Topic Center.
- 15 Non-Certified IT Skills Growing in Demand
- How 19 Tech Titans Target Healthcare
- Twitter Suffering From Growing Pains (and Facebook Comparisons)
- Agile Comes to Data Integration
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- Face Time Anytime Real-time communications facilitates team collaboration from nearly anywhere in the world. With facts and figures you can use to justify an investment
- Riverbed Stingray Application Firewall: Securing Cloud Applications with a Distributed Web Application Firewall Responsibility over IT security is moving away from the network and IT infrastructure and to the application and software architecture itself. IT organizations...
- Now is the time to implement a video conference solution Video conferencing is getting a lot of buzz lately due to the recent cost decrease, making it tangible for many law firms. It's...
- Video drives engagement Achieving maximum results means building a solid platform and network infrastructure. As digital age unfolds, it's clear that the ability to communicate effectively...
- Meg Whitman presents Unlocking IT with Big Data During this Web Event you will hear Meg Whitman, President and CEO, HP discuss HAVEn - the #1 Big Data platform, as well...
- The New Way to Work Knowledge Vault This Knowledge Vault focuses on how, in today's increasingly virtual world, it's more important than ever to engage deeply with employees, suppliers, partners,... All Web Apps White Papers | Webcasts