{"id":20604,"date":"2026-07-06T05:08:19","date_gmt":"2026-07-05T20:08:19","guid":{"rendered":"https:\/\/tomorrowaccess.com\/?page_id=20604"},"modified":"2026-10-27T14:29:11","modified_gmt":"2026-10-27T05:29:11","slug":"facebook-2012","status":"publish","type":"page","link":"https:\/\/tomorrowaccess.com\/en\/s-1-journal\/facebook-2012","title":{"rendered":"One in Eight People on Earth Uses It. On Mobile, It Earns Nothing."},"content":{"rendered":"<style>@import url('https:\/\/fonts.googleapis.com\/css2?family=Newsreader:ital,opsz,wght@0,6..72,400;0,6..72,500;0,6..72,600;1,6..72,400&display=swap');html,body {max-width: 100vw !important;overflow-x: hidden !important;}main,main > .entry-content,main > .wp-block-post-content,main > .wp-block-post-content.is-layout-constrained,main > .wp-block-post-content.is-layout-constrained > *,main .wp-block-group,main .wp-block-post-content {max-width: 100% !important;padding-left: 0 !important;padding-right: 0 !important;margin-left: 0 !important;margin-right: 0 !important;}main#wp--skip-link--target {padding: 0 !important;margin-top: 0 !important;max-width: 100% !important;}.s1-figure-inline {display: block;width: 100%;max-width: 100%;margin: 60px 0;padding: 0;box-sizing: border-box;}.s1-figure-inline picture {display: block;width: 100%;}.s1-figure-inline img {display: block;width: 100%;max-width: 100%;height: auto;margin: 0;}@media (max-width: 720px) {.s1-hero-grid {grid-template-columns: 1fr !important;}.s1-hero-grid > div {border-right: none !important;border-bottom: 1px solid #e6e6e6 !important;padding: 24px 12px !important;}.s1-hero-grid > div:last-child {border-bottom: none !important;}.s1-hero-grid > div > div:first-child {font-size: 32px !important;white-space: normal !important;}.s1-body-table,.s1-body-table tbody,.s1-body-table tr,.s1-body-table td,.s1-body-table th {display: block !important;width: 100% !important;max-width: 100% !important;box-sizing: border-box !important;}.s1-body-table thead {display: none !important;}.s1-body-table tr {margin-bottom: 16px !important;padding: 8px 0 !important;border-top: 1px solid #1a1a1a !important;}.s1-body-table tr:last-child {border-bottom: 1px solid #1a1a1a !important;}.s1-body-table td {text-align: left !important;padding: 6px 8px !important;}.s1-body-table td::before {content: attr(data-label) \": \";font-weight: 700 !important;color: #000 !important;}.s1-body-table td:first-child::before,.s1-body-table td[data-label=\"\"]::before {display: none !important;}.s1-light-shadow {flex-direction: column !important;}.s1-light-shadow > div {border-left: 1px solid #1a1a1a !important;border-top: 0 !important;}.s1-light-shadow > div:first-child {border-top: 1px solid #1a1a1a !important;}h1 {font-size: clamp(26px, 7vw, 34px) !important;}h2 {font-size: clamp(22px, 5.5vw, 28px) !important;}.s1-article-cta-headline {font-size: 24px !important; line-height: 1.4 !important;}}@media (max-width: 480px) {.s1-article-cta-headline {font-size: 20px !important;}}main .wp-block-post-content>.alignfull{margin-left:calc(-1*var(--wp--style--root--padding-left,20px)) !important;margin-right:calc(-1*var(--wp--style--root--padding-right,20px)) !important;max-width:none !important;width:auto !important;}<\/style>\n<div class=\"alignfull\" style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; color: #1a1a1a; overflow-wrap: break-word; text-wrap: pretty; font-size: 16px; -webkit-font-smoothing: antialiased; background: #fafafa; width: 100%;\">\n<div style=\"max-width: 1000px; margin: 0 auto; padding: 80px 20px 0; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif;\">\n  <a href=\"https:\/\/tomorrowaccess.com\/en\/s-1-journal\/\" style=\"text-decoration: none; color: inherit; display: block;\"><\/p>\n<div style=\"text-align: left; margin-bottom: 40px;\">\n<div style=\"width: 100%; height: 5px; background: #1a1a1a;\"><\/div>\n<div style=\"margin-top: 26px; font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 32px; font-weight: 600; color: #1a1a1a; letter-spacing: 0.01em; line-height: 1; margin-bottom: 14px;\">S-1 <span style=\"color: #daa241;\">Journal<\/span><\/div>\n<div style=\"display: flex; align-items: center; flex-wrap: wrap; gap: 14px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; margin-bottom: 26px;\">\n        <span style=\"font-size: 11px; letter-spacing: 0.18em; color: #1a1a1a; font-weight: 700; text-transform: uppercase;\">The 10 Questions<\/span><br \/>\n        <span style=\"font-size: 11px; color: #ccc;\">|<\/span><br \/>\n        <span style=\"font-size: 12px; letter-spacing: 0.02em; color: #666; font-weight: 400;\">Every S-1, decoded through the same 10 questions.<\/span>\n      <\/div>\n<div style=\"width: 100%; height: 1px; background: #daa241;\"><\/div>\n<\/p><\/div>\n<p>  <\/a>\n<\/div>\n<div style=\"max-width: 720px; margin: 0 auto; padding: 0 20px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; color: #1a1a1a; overflow-wrap: break-word; text-wrap: pretty;\">\n<div style=\"margin: 0 0 32px 0;\">\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 30px; font-weight: 600; letter-spacing: 0; color: #daa241; margin: 0; line-height: 1.2;\">Facebook<\/p>\n<\/div>\n<h1 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(32px, 6vw, 46px); font-weight: 600; line-height: 1.2; letter-spacing: -0.01em; color: #000; margin: 0 0 40px 0; text-wrap: pretty;\">One in Eight People on Earth Uses It.<br \/>On Mobile, It Earns Nothing.<\/h1>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.03em; color: #888; margin: 0 0 60px 0; border-bottom: 1px solid #e6e6e6; padding-bottom: 16px;\">Source: <a href=\"https:\/\/www.sec.gov\/Archives\/edgar\/data\/1326801\/000119312512034517\/d287954ds1.htm\" target=\"_blank\" rel=\"noopener\" style=\"color: #daa241; text-decoration: underline; text-underline-offset: 3px; text-decoration-thickness: 1px;\">Facebook, Inc. S-1 (filed 2012-02-01) \u2197<\/a><\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">In February 2012, Facebook filed its <span style=\"white-space:nowrap;\">S-1<\/span>. <strong style=\"font-weight: 700; color: #000;\">Monthly active users (MAU): 845 million<\/strong>. Of the world&rsquo;s 7 billion people at the time, <strong style=\"font-weight: 700; color: #000;\">one in eight used the service<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Revenue was <span style=\"white-space:nowrap;\">$3,711<\/span> million, net income <span style=\"white-space:nowrap;\">$1,000<\/span> million. An <strong style=\"font-weight: 700; color: #000;\">operating margin of <span style=\"white-space:nowrap;\">47%<\/span><\/strong> &mdash; nearly half of all revenue dropping through as profit, an extraordinarily high level.<\/p>\n<\/div>\n<div style=\"max-width: 720px; margin: 80px auto; padding: 0 20px;\">\n<div class=\"s1-hero-grid\" style=\"border-top: 1px solid #1a1a1a; border-bottom: 1px solid #1a1a1a; padding: 50px 0; display: grid; grid-template-columns: repeat(3, 1fr); gap: 0; text-align: center; align-items: start;\">\n<div style=\"padding: 0 12px; border-right: 1px solid #e6e6e6;\">\n<div style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(28px, 4.5vw, 36px); font-weight: 500; line-height: 1.05; color: #000; letter-spacing: -0.02em; white-space: nowrap;\">845M<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 10.5px; letter-spacing: 0.2em; color: #daa241; margin-top: 18px; font-weight: 700; text-transform: uppercase;\">MAU<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.04em; color: #888; margin-top: 6px; font-weight: 400; line-height: 1.4;\">monthly active users<\/div>\n<\/p><\/div>\n<div style=\"padding: 0 12px; border-right: 1px solid #e6e6e6;\">\n<div style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(28px, 4.5vw, 36px); font-weight: 500; line-height: 1.05; color: #000; letter-spacing: -0.02em; white-space: nowrap;\">47%<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 10.5px; letter-spacing: 0.2em; color: #daa241; margin-top: 18px; font-weight: 700; text-transform: uppercase;\">OP MARGIN<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.04em; color: #888; margin-top: 6px; font-weight: 400; line-height: 1.4;\">operating margin<\/div>\n<\/p><\/div>\n<div style=\"padding: 0 12px;\">\n<div style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(28px, 4.5vw, 36px); font-weight: 500; line-height: 1.05; color: #000; letter-spacing: -0.02em; white-space: nowrap;\">$0<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 10.5px; letter-spacing: 0.2em; color: #daa241; margin-top: 18px; font-weight: 700; text-transform: uppercase;\">MOBILE AD<\/div>\n<div style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.04em; color: #888; margin-top: 6px; font-weight: 400; line-height: 1.4;\">mobile ad revenue (the bomb)<\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/div>\n<div style=\"max-width: 720px; margin: 0 auto; padding: 0 20px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; color: #1a1a1a; overflow-wrap: break-word; text-wrap: pretty;\">\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 60px 0 1.5em 0;\">And yet &mdash; the <span style=\"white-space:nowrap;\">S-1<\/span> contains a sentence that is extraordinary for a company of this scale: &ldquo;<strong style=\"font-weight: 700; color: #000;\">We do not currently directly generate any meaningful revenue from the use of Facebook mobile products<\/strong>.&rdquo; More than half of all users were accessing Facebook from mobile, and ad revenue from there was zero.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Founder Mark Zuckerberg was 27. He <strong style=\"font-weight: 700; color: #000;\">held <span style=\"white-space:nowrap;\">55.8%<\/span> of the voting power by himself<\/strong> (per the <span style=\"white-space:nowrap;\">S-1<\/span>\/A). What the <span style=\"white-space:nowrap;\">S-1<\/span> shows is a company in which a <span style=\"white-space:nowrap;\">27-year-old<\/span> controls one in eight people on Earth and heads into the largest Internet IPO to date with zero mobile revenue.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.4em 0;\">Ten questions. We lay out only what the S-1 says.<\/p>\n<p><!--s1nltop--><\/p>\n<div class=\"s1-nl-top\" id=\"s1nltop-en\" style=\"max-width:680px;margin:56px auto 0;padding:20px;border:1px solid #e6e6e6;border-left:3px solid #daa241;background:#ffffff;font-family:'Helvetica Neue', Helvetica, Arial, 'Hiragino Kaku Gothic ProN', '\u30d2\u30e9\u30ae\u30ce\u89d2\u30b4 ProN W3', 'Noto Sans JP', 'Yu Gothic', sans-serif;word-break:keep-all;line-break:strict;box-sizing:border-box;\">\n<p style=\"font-size:11px;letter-spacing:0.22em;font-weight:700;color:#daa241;margin:0 0 8px;\">S-1 JOURNAL NEWSLETTER<\/p>\n<p style=\"font-size:13.5px;line-height:1.7;color:#1a1a1a;margin:0 0 14px;\">Get the Ten Questions checklist (PDF) and the next S-1 reality check, free by email.<\/p>\n<form action=\"https:\/\/tomorrowaccess.com\/wp-json\/s1\/v1\/waitlist\" method=\"post\" onsubmit=\"return s1nlTopSubmit_en(this)\" style=\"display:flex;gap:8px;flex-wrap:wrap;margin:0;\"><input type=\"hidden\" name=\"source\" value=\"s1nltop-en-nojs\"><input type=\"email\" name=\"email\" required placeholder=\"Your email\" style=\"flex:1;min-width:180px;padding:10px 14px;font-size:14px;font-family:inherit;border:1px solid #e6e6e6;background:#fafafa;color:#000000;border-radius:0;box-sizing:border-box;\"><button type=\"submit\" style=\"background:#daa241;color:#ffffff;border:0;border-radius:0;padding:10px 22px;font-size:13px;font-weight:700;letter-spacing:0.08em;font-family:inherit;cursor:pointer;\">Subscribe<\/button><\/form>\n<p><script>function s1nlTopSubmit_en(f){var b=f.querySelector(\"button\");b.disabled=true;var em=(f.querySelector(\"input[type=email]\").value||\"\").trim();fetch(f.action,{method:\"POST\",headers:{\"Content-Type\":\"application\/json\"},body:JSON.stringify({email:em,source:location.pathname+\"#top\"})}).then(function(r){return r.json()}).then(function(j){if(j&&j.ok){document.getElementById(\"s1nltop-en\").innerHTML=\"<\/p>\n<p style=\\\"font-size:14px;font-weight:700;color:#1a1a1a;margin:0;\\\">\u2713 You're in \u2014 the checklist PDF is on its way to your inbox.<\/p>\n<p>\";}else{b.disabled=false;alert(\"Something went wrong. Please try again later.\");}}).catch(function(){b.disabled=false;alert(\"Something went wrong. Please try again later.\");});return false;}<\/script><\/div>\n<p><!--\/s1nltop--><\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 1<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">What is this company, really?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">Prospectus Summary (p.1+), Business (p.68+) \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">In one line: a social networking service that connects people to people.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Facebook&rsquo;s mission is &ldquo;<strong style=\"font-weight: 700; color: #000;\">to make the world more open and connected<\/strong>.&rdquo;<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Users <strong style=\"font-weight: 700; color: #000;\">create a profile under their real name<\/strong>. They post text, photos, and video, and friends, family, and colleagues respond with <strong style=\"font-weight: 700; color: #000;\">&ldquo;Likes&rdquo; and comments<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\"><strong style=\"font-weight: 700; color: #000;\">The scale is extraordinary<\/strong>. In 2012 the world had about 7 billion people and more than 2 billion internet users (<span style=\"white-space:nowrap;\">S-1<\/span>). Facebook was <strong style=\"font-weight: 700; color: #000;\">a service used by roughly <span style=\"white-space:nowrap;\">40%<\/span> of the internet population<\/strong>.<\/p>\n<div style=\"margin: 30px 0;\">\n<table class=\"s1-body-table\" style=\"width: 100%; table-layout: fixed; border-collapse: collapse; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; font-variant-numeric: tabular-nums;\">\n<thead>\n<tr style=\"border-top: 2px solid #1a1a1a; border-bottom: 1px solid #1a1a1a;\">\n<th style=\"padding: 14px 8px; text-align: left; font-weight: 700; color: #000; word-break: break-word;\">Metric<\/th>\n<th style=\"padding: 14px 8px; text-align: right; font-weight: 700; color: #000; word-break: break-word;\">Figure<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Monthly active users (MAU)<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">845 million<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Daily active users (DAU)<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">483 million<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">DAU\/MAU ratio (engagement)<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">57%<\/span><\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Photos uploaded each day<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">over 250 million<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Total friend connections<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">over 100 billion<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #1a1a1a;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Languages supported<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">over 70<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\"><strong style=\"font-weight: 700; color: #000;\">A communication infrastructure on a planetary scale<\/strong> &mdash; that is what Facebook was in 2012.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 2<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">What does it compete on?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">Business (Competitive Strengths, p.70+) \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Facebook competes in three distinctive ways.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Real names x the social graph<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Facebook&rsquo;s greatest moat is <strong style=\"font-weight: 700; color: #000;\">the <span style=\"white-space:nowrap;\">real-name<\/span> policy<\/strong>. Unlike anonymous message boards or <span style=\"white-space:nowrap;\">handle-name<\/span> cultures, users <strong style=\"font-weight: 700; color: #000;\">register under their real names and bring their <span style=\"white-space:nowrap;\">real-world<\/span> relationships directly onto the platform<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The <span style=\"white-space:nowrap;\">S-1<\/span> puts it this way: &ldquo;People use Facebook to stay connected with their friends and family, to discover what is going on in the world, and to share and express what matters to them.&rdquo;<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">This social graph (a map of human relationships) grows more valuable the more users there are. Your friends are on Facebook, so you use it too &mdash; a textbook network effect. <strong style=\"font-weight: 700; color: #000;\">A <span style=\"white-space:nowrap;\">real-name<\/span> social graph of 800 million people cannot be replicated by anyone else<\/strong>.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">News Feed (the algorithm that owns your time)<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The &ldquo;News Feed&rdquo; that flows across Facebook&rsquo;s home screen reorders friends&rsquo; posts by algorithm, surfacing the posts a user is most likely to care about.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">This is what generates time spent. Users spend tens of minutes a day on Facebook on average. It is <strong style=\"font-weight: 700; color: #000;\">a machine for taking time away from television and newspapers<\/strong>.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Facebook Platform (an ecosystem that pulls in developers)<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">At the time of the <span style=\"white-space:nowrap;\">S-1<\/span>, <strong style=\"font-weight: 700; color: #000;\">more than 7 million apps and websites<\/strong> integrate Facebook Platform. They install a &ldquo;Log in with Facebook&rdquo; button and tap into the social graph.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The biggest example is Zynga (the <span style=\"white-space:nowrap;\">social-game<\/span> maker behind FarmVille and others). In 2011, <strong style=\"font-weight: 700; color: #000;\">Zynga accounted for about <span style=\"white-space:nowrap;\">12%<\/span> of Facebook&rsquo;s total revenue<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\"><span style=\"white-space:nowrap;\">Real-name<\/span> social graph + News Feed + Platform &mdash; it held human relationships themselves.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 3<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">How big is the market?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">Business (The Opportunity, p.69+) \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The market comes down to three numbers.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The <span style=\"white-space:nowrap;\">S-1<\/span>&rsquo;s The Opportunity section starts with the size of the market. <strong style=\"font-weight: 700; color: #000;\">Global advertising spend was <span style=\"white-space:nowrap;\">$588<\/span> billion in 2010<\/strong> (the <span style=\"white-space:nowrap;\">S-1<\/span> attributes this to &ldquo;an industry source&rdquo;). Of that, online advertising was projected to grow from <span style=\"white-space:nowrap;\">$68<\/span> billion in 2010 to <span style=\"white-space:nowrap;\">$120<\/span> billion in 2015 &mdash; <strong style=\"font-weight: 700; color: #000;\">its share of global ad spend rising from <span style=\"white-space:nowrap;\">12%<\/span> to <span style=\"white-space:nowrap;\">16%<\/span><\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">But the real message lies elsewhere. It is written this way: &ldquo;We believe that the shift to a more social web creates <strong style=\"font-weight: 700; color: #000;\">new opportunities for businesses to engage with interested customers<\/strong>.&rdquo;<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\"><strong style=\"font-weight: 700; color: #000;\">Offline advertising moves online, then on to social and mobile<\/strong>. <strong style=\"font-weight: 700; color: #000;\">Facebook is positioned to catch both tailwinds at once<\/strong> &mdash; that is the message.<\/p>\n<div style=\"margin: 30px 0;\">\n<table class=\"s1-body-table\" style=\"width: 100%; table-layout: fixed; border-collapse: collapse; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; font-variant-numeric: tabular-nums;\">\n<thead>\n<tr style=\"border-top: 2px solid #1a1a1a; border-bottom: 1px solid #1a1a1a;\">\n<th style=\"padding: 14px 8px; text-align: left; font-weight: 700; color: #000; word-break: break-word;\">Metric<\/th>\n<th style=\"padding: 14px 8px; text-align: right; font-weight: 700; color: #000; word-break: break-word;\">Figure<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Global ad spend (2010, industry source)<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$588B<\/span><\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Of which online advertising (2010, industry source)<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$68B<\/span><\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Online advertising (2015 forecast, industry source)<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$120B<\/span><\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #1a1a1a;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Global internet users (industry source, 2011)<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">over 2 billion<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Online + social + mobile &mdash; positioned to catch three tailwinds at once.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 4<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">Who actually uses it?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">Business (Users, p.71+) \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Let&rsquo;s lay out Facebook&rsquo;s &ldquo;users&rdquo; in numbers.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">What stands out is <strong style=\"font-weight: 700; color: #000;\">mobile MAU of 425 million<\/strong>. <strong style=\"font-weight: 700; color: #000;\">More than half of all users access Facebook from mobile<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">And yet &mdash; <strong style=\"font-weight: 700; color: #000;\">mobile ad revenue is zero<\/strong>. This is the greatest tension in Facebook&rsquo;s <span style=\"white-space:nowrap;\">S-1<\/span>. <strong style=\"font-weight: 700; color: #000;\">User behavior is moving to mobile, but Facebook has no way to make money from that move<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">845 million people &mdash; roughly <span style=\"white-space:nowrap;\">40%<\/span> of the planet&rsquo;s internet population &mdash; had gathered on a single service. But <strong style=\"font-weight: 700; color: #000;\">on half of their phone screens, Facebook was earning nothing<\/strong>.<\/p>\n<div style=\"margin: 30px 0;\">\n<table class=\"s1-body-table\" style=\"width: 100%; table-layout: fixed; border-collapse: collapse; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; font-variant-numeric: tabular-nums;\">\n<thead>\n<tr style=\"border-top: 2px solid #1a1a1a; border-bottom: 1px solid #1a1a1a;\">\n<th style=\"padding: 14px 8px; text-align: left; font-weight: 700; color: #000; word-break: break-word;\">Metric<\/th>\n<th style=\"padding: 14px 8px; text-align: right; font-weight: 700; color: #000; word-break: break-word;\">Figure<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Monthly active users (MAU)<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">845 million<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Daily active users (DAU)<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">483 million<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Engagement (DAU\/MAU)<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">57%<\/span><\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Mobile MAU<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">425 million<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">US &#038; Canada MAU<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">179 million<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Europe MAU<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">229 million<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #1a1a1a;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Asia MAU<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">212 million<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">On half of 845 million users&rsquo; phone screens, Facebook was earning nothing.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 5<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">How does it make money?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">MD&amp;A (p.38+), Business (How We Generate Revenue, p.77+) \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Facebook has two sources of revenue.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Advertising is mainly of two kinds: <strong style=\"font-weight: 700; color: #000;\"><span style=\"white-space:nowrap;\">self-serve<\/span> ads shown in the <span style=\"white-space:nowrap;\">right-hand<\/span> column<\/strong> of the Facebook screen, and <strong style=\"font-weight: 700; color: #000;\">Sponsored Stories<\/strong> (native ads that run inside the News Feed, launched in 2011).<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Advertisers can <strong style=\"font-weight: 700; color: #000;\">target<\/strong>. A user&rsquo;s age, gender, location, interests, relationships &mdash; <strong style=\"font-weight: 700; color: #000;\">thanks to real names plus <span style=\"white-space:nowrap;\">self-reported<\/span> data, ad delivery is more precise than any other medium<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Payments is mainly from social games such as Zynga. When virtual goods are sold on Facebook Platform, <strong style=\"font-weight: 700; color: #000;\">Facebook collects a fee of up to <span style=\"white-space:nowrap;\">30%<\/span><\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Annual revenue per user (ARPU) was <strong style=\"font-weight: 700; color: #000;\"><span style=\"white-space:nowrap;\">$5.11<\/span> on a global average in 2011<\/strong> (per the <span style=\"white-space:nowrap;\">S-1<\/span>\/A; rising <span style=\"white-space:nowrap;\">$3.08<\/span> in 2009 -> <span style=\"white-space:nowrap;\">$4.08<\/span> in 2010 -> <span style=\"white-space:nowrap;\">$5.11<\/span> in 2011). Regional differences are large, with the US and Canada standing out at the top and Asia and other regions lower. Multiply that unit figure by 845 million monthly users and you reach 2011 total revenue of <span style=\"white-space:nowrap;\">$3,711<\/span> million.<\/p>\n<div style=\"margin: 30px 0;\">\n<table class=\"s1-body-table\" style=\"width: 100%; table-layout: fixed; border-collapse: collapse; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; font-variant-numeric: tabular-nums;\">\n<thead>\n<tr style=\"border-top: 2px solid #1a1a1a; border-bottom: 1px solid #1a1a1a;\">\n<th style=\"padding: 14px 8px; text-align: left; font-weight: 700; color: #000; word-break: break-word;\">Revenue stream<\/th>\n<th style=\"padding: 14px 8px; text-align: right; font-weight: 700; color: #000; word-break: break-word;\">Amount<\/th>\n<th style=\"padding: 14px 8px; text-align: right; font-weight: 700; color: #000; word-break: break-word;\">Share<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Advertising<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$3,154M<\/span><\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">85%<\/span><\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Payments and Other Fees<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$557M<\/span><\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">15%<\/span><\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #1a1a1a;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Total<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$3,711M<\/span><\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">100%<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\"><span style=\"white-space:nowrap;\">$5.11<\/span> per user per year, across 845 million monthly users &mdash; 2011 total revenue of <span style=\"white-space:nowrap;\">$3,711<\/span> million.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 6<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">Are the numbers healthy?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">Selected Financial Data (p.36+), MD&amp;A (p.38+) \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\"><strong style=\"font-weight: 700; color: #000;\">Revenue up 4.8x in three years<\/strong>. And already profitable.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Start by laying out the financial facts.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">What stands out is the operating margin of <span style=\"white-space:nowrap;\">47%<\/span>.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Anomaly: <strong style=\"font-weight: 700; color: #000;\">a <span style=\"white-space:nowrap;\">47%<\/span> margin is extraordinarily high<\/strong><\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Facebook&rsquo;s operating margin of <span style=\"white-space:nowrap;\">47%<\/span> is an extremely high level for a tech company.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The reveal is simple. <strong style=\"font-weight: 700; color: #000;\">Facebook&rsquo;s service is, in essence, made by its users<\/strong>. <strong style=\"font-weight: 700; color: #000;\">Content production cost is zero<\/strong>. Apart from data centers and engineers, the structure incurs almost no variable cost.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">The conclusion<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">As of the end of 2011, <strong style=\"font-weight: 700; color: #000;\">cash plus marketable securities was about <span style=\"white-space:nowrap;\">$3.9<\/span> billion<\/strong>. &ldquo;Revenue up 5x in three years, a <span style=\"white-space:nowrap;\">47%<\/span> margin, about <span style=\"white-space:nowrap;\">$3.9<\/span> billion in cash&rdquo; &mdash; <strong style=\"font-weight: 700; color: #000;\">numbers that look perfect<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">But there is one bomb. <strong style=\"font-weight: 700; color: #000;\">Zero mobile revenue<\/strong>. This connects directly to the biggest risk in Question 9.<\/p>\n<div style=\"margin: 30px 0;\">\n<table class=\"s1-body-table\" style=\"width: 100%; table-layout: fixed; border-collapse: collapse; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; font-variant-numeric: tabular-nums;\">\n<thead>\n<tr style=\"border-top: 2px solid #1a1a1a; border-bottom: 1px solid #1a1a1a;\">\n<th style=\"padding: 14px 8px; text-align: left; font-weight: 700; color: #000; word-break: break-word;\">Year<\/th>\n<th style=\"padding: 14px 8px; text-align: right; font-weight: 700; color: #000; word-break: break-word;\">Revenue<\/th>\n<th style=\"padding: 14px 8px; text-align: right; font-weight: 700; color: #000; word-break: break-word;\">Operating income<\/th>\n<th style=\"padding: 14px 8px; text-align: right; font-weight: 700; color: #000; word-break: break-word;\">Net income<\/th>\n<th style=\"padding: 14px 8px; text-align: right; font-weight: 700; color: #000; word-break: break-word;\">Operating margin<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">2009<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$777M<\/span><\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">&mdash;<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">&mdash;<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\">&mdash;<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">2010<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$1,974M<\/span><\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$1,032M<\/span><\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$606M<\/span><\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">52%<\/span><\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #1a1a1a;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">2011<\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$3,711M<\/span><\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$1,756M<\/span><\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$1,000M<\/span><\/td>\n<td style=\"padding: 14px 8px; text-align: right; word-break: break-word; font-variant-numeric: tabular-nums; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">47%<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Numbers that look perfect, but one bomb &mdash; zero mobile revenue.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 7<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">Who runs it?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">Management (p.110+), Letter from Mark Zuckerberg \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Facebook is <strong style=\"font-weight: 700; color: #000;\">a company controlled by one man<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The <span style=\"white-space:nowrap;\">S-1<\/span> includes &ldquo;A Letter from Mark Zuckerberg.&rdquo; Zuckerberg defines the reason the company exists like this.<\/p>\n<blockquote style=\"position: relative; margin: 36px 0; padding: 20px 22px 16px 22px; background: #f5f1e6; box-sizing: border-box; max-width: 100%; overflow: hidden;\"><p>\n<span aria-hidden=\"true\" style=\"position: absolute; top: 2px; left: 10px; font-family: Georgia, 'Times New Roman', serif; font-size: 42px; font-weight: 400; color: #daa241; line-height: 1;\">&ldquo;<\/span><\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 17px; font-weight: 400; line-height: 1.65; letter-spacing: 0.02em; color: #1a1a1a; margin: 0 0 10px 0; padding-left: 24px; overflow-wrap: break-word; overflow-wrap: break-word;\">Simply put: we don&#8217;t build services to make money; <strong style=\"font-weight: 700; color: #000;\">we make money to build better services<\/strong>.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 9.5px; font-weight: 700; letter-spacing: 0.16em; color: #daa241; margin: 0; padding-left: 24px; overflow-wrap: anywhere;\">FACEBOOK S-1 (FEB 2012) \u2014 LETTER FROM MARK ZUCKERBERG<\/p>\n<\/blockquote>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">In an IPO document, he declared plainly that the company&rsquo;s purpose is not shareholder returns but the mission.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Mark Zuckerberg (Founder, Chairman &#038; CEO)<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\"><strong style=\"font-weight: 700; color: #000;\">Aged 27 at the time of the <span style=\"white-space:nowrap;\">S-1<\/span> filing<\/strong>. He had served as CEO since 2004 and <strong style=\"font-weight: 700; color: #000;\">studied computer science at Harvard University<\/strong>.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Sheryl Sandberg (COO)<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Appointed in 2008; <strong style=\"font-weight: 700; color: #000;\">previously a VP at Google<\/strong>. An <span style=\"white-space:nowrap;\">advertising-business<\/span> specialist, she led the monetization of Facebook&rsquo;s advertising. She brought the <span style=\"white-space:nowrap;\">ad-targeting<\/span> methodology established at Google to Facebook.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">The structure<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">A <span style=\"white-space:nowrap;\">27-year-old<\/span> founder wrote that it &ldquo;is not for the money.&rdquo; And yet he ran a company with about <span style=\"white-space:nowrap;\">$3.7<\/span> billion in revenue and a <span style=\"white-space:nowrap;\">47%<\/span> margin. <strong style=\"font-weight: 700; color: #000;\">Eight years out of Harvard, he had built the most widely used service<\/strong> in the world.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\"><strong style=\"font-weight: 700; color: #000;\">Eight years out of Harvard, he had built the most widely used service<\/strong> in the world.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 8<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">Who controls it?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">Description of Capital Stock (p.148+), Principal Stockholders (p.139+) \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">This is the core mechanism of Facebook&rsquo;s <span style=\"white-space:nowrap;\">S-1<\/span>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">It is a <span style=\"white-space:nowrap;\">dual-class<\/span> structure, just like Google&rsquo;s &ldquo;<strong style=\"font-weight: 700; color: #000;\">one share, 10 votes<\/strong>.&rdquo; <strong style=\"font-weight: 700; color: #000;\">One man holds <span style=\"white-space:nowrap;\">55.8%<\/span> of the voting power<\/strong>. <strong style=\"font-weight: 700; color: #000;\">Even if every other shareholder votes against him, Zuckerberg cannot be overruled<\/strong>. He holds a majority by himself.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">This is possible because, on top of his own <span style=\"white-space:nowrap;\">Class B<\/span> stock, he holds proxies from other shareholders. Director James Breyer (Accel) and others have entered into <strong style=\"font-weight: 700; color: #000;\">agreements to assign their voting rights to Zuckerberg<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Facebook is Zuckerberg&rsquo;s company. Even selling roughly <span style=\"white-space:nowrap;\">$16<\/span> billion of stock in the IPO does not dilute his <span style=\"white-space:nowrap;\">decision-making<\/span> power by a millimeter. A <span style=\"white-space:nowrap;\">27-year-old<\/span> founder controls the most widely used service in the world by himself.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">What protects this<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The <span style=\"white-space:nowrap;\">S-1<\/span> states it clearly: &ldquo;Mr. Zuckerberg has the ability to control the outcome of matters submitted to our stockholders for approval&rdquo; &mdash; including the election of directors and any merger, consolidation, or sale of assets.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">In other words, <strong style=\"font-weight: 700; color: #000;\">the election of directors and the sale of the company can both be decided by Zuckerberg alone<\/strong>. The Risk Factors then warn investors plainly.<\/p>\n<blockquote style=\"position: relative; margin: 36px 0; padding: 20px 22px 16px 22px; background: #f5f1e6; box-sizing: border-box; max-width: 100%; overflow: hidden;\"><p>\n<span aria-hidden=\"true\" style=\"position: absolute; top: 2px; left: 10px; font-family: Georgia, 'Times New Roman', serif; font-size: 42px; font-weight: 400; color: #daa241; line-height: 1;\">&ldquo;<\/span><\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 17px; font-weight: 400; line-height: 1.65; letter-spacing: 0.02em; color: #1a1a1a; margin: 0 0 10px 0; padding-left: 24px; overflow-wrap: break-word; overflow-wrap: break-word;\"><strong style=\"font-weight: 700; color: #000;\">This concentrated control will limit your ability to influence corporate matters<\/strong>.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 9.5px; font-weight: 700; letter-spacing: 0.16em; color: #daa241; margin: 0; padding-left: 24px; overflow-wrap: anywhere;\">FACEBOOK S-1 (FEB 2012) \u2014 RISK FACTORS, CONTROL<\/p>\n<\/blockquote>\n<div style=\"margin: 30px 0;\">\n<table class=\"s1-body-table\" style=\"width: 100%; table-layout: fixed; border-collapse: collapse; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; font-variant-numeric: tabular-nums;\">\n<thead>\n<tr style=\"border-top: 2px solid #1a1a1a; border-bottom: 1px solid #1a1a1a;\">\n<th style=\"padding: 14px 8px; text-align: left; font-weight: 700; color: #000; word-break: break-word;\">Share class<\/th>\n<th style=\"padding: 14px 8px; text-align: left; font-weight: 700; color: #000; word-break: break-word;\">Votes per share<\/th>\n<th style=\"padding: 14px 8px; text-align: left; font-weight: 700; color: #000; word-break: break-word;\">Dividend<\/th>\n<th style=\"padding: 14px 8px; text-align: left; font-weight: 700; color: #000; word-break: break-word;\">Who holds it<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">Class A<\/span><\/td>\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">1 vote<\/td>\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">None<\/td>\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Public investors who buy at IPO<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #1a1a1a;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">Class B<\/span><\/td>\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">10 votes<\/td>\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">None<\/td>\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Founders &#038; existing holders (convert to <span style=\"white-space:nowrap;\">Class A<\/span> on sale)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">A <span style=\"white-space:nowrap;\">27-year-old<\/span> controls the most widely used service in the world by himself.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 9<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">What is it afraid of?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">Risk Factors (p.11+) \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Here are the five things Facebook itself says it worries about most.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">The shift to mobile (the biggest risk)<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The clearest and most serious risk in the <span style=\"white-space:nowrap;\">S-1<\/span> is this one.<\/p>\n<blockquote style=\"position: relative; margin: 36px 0; padding: 20px 22px 16px 22px; background: #f5f1e6; box-sizing: border-box; max-width: 100%; overflow: hidden;\"><p>\n<span aria-hidden=\"true\" style=\"position: absolute; top: 2px; left: 10px; font-family: Georgia, 'Times New Roman', serif; font-size: 42px; font-weight: 400; color: #daa241; line-height: 1;\">&ldquo;<\/span><\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 17px; font-weight: 400; line-height: 1.65; letter-spacing: 0.02em; color: #1a1a1a; margin: 0 0 10px 0; padding-left: 24px; overflow-wrap: break-word; overflow-wrap: break-word;\"><strong style=\"font-weight: 700; color: #000;\">Growth in use of Facebook through our mobile products<\/strong>, where we do not currently display ads, as a substitute for use on personal computers may negatively affect our revenue and financial results.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 9.5px; font-weight: 700; letter-spacing: 0.16em; color: #daa241; margin: 0; padding-left: 24px; overflow-wrap: anywhere;\">FACEBOOK S-1 (FEB 2012) \u2014 RISK FACTORS, MOBILE<\/p>\n<\/blockquote>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Users are shifting to mobile (more than half of MAU are on mobile). But Facebook has not yet established a way to show ads on mobile. Desktop ad revenue falls and mobile ad revenue does not rise &mdash; if that scenario plays out, <strong style=\"font-weight: 700; color: #000;\">revenue growth stops<\/strong>.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Dependence on Zynga<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Nearly all of the <span style=\"white-space:nowrap;\">$557M<\/span> in 2011 Payments revenue came from social games, led by Zynga. Zynga also buys ads directly, so counting fees and advertising together, <strong style=\"font-weight: 700; color: #000;\">about <span style=\"white-space:nowrap;\">12%<\/span> of total revenue is tied to Zynga alone<\/strong>. A downturn at Zynga hits Facebook directly.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Risk of users leaving<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The <span style=\"white-space:nowrap;\">S-1<\/span> warns that if Facebook fails to retain existing users or add new users, its revenue and financial results may be adversely affected. <strong style=\"font-weight: 700; color: #000;\">The possibility that 845 million users move to another service<\/strong>. The <span style=\"white-space:nowrap;\">S-1<\/span> names Google, Microsoft, Twitter, and Google+ as competitors.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Privacy regulation<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The <span style=\"white-space:nowrap;\">S-1<\/span> warns that governments around the world are considering laws on the collection, use, and disclosure of personal information. The user data Facebook holds (real names, relationships, location, behavioral history) sits at <strong style=\"font-weight: 700; color: #000;\">the front line of tightening regulation<\/strong>. The <span style=\"white-space:nowrap;\">S-1<\/span> notes that a revision of the 1995 EU Data Protection Directive was under consideration at the time &mdash; the seed of stronger privacy regulation was already visible in 2012.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">The risk of founder control<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The <span style=\"white-space:nowrap;\">S-1<\/span> itself lists this as a Risk Factor: Mr. Zuckerberg controls the direction of the business, and his interests may not always be aligned with the shareholders&rsquo;. <strong style=\"font-weight: 700; color: #000;\">The absence of any external check on a founder&rsquo;s misjudgment<\/strong> is recognized as a risk.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Zero mobile advertising, single dependence on Zynga, user departures, privacy, and founder control. Five in all.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 13px; letter-spacing: 0.22em; font-weight: 700; color: #daa241; margin: 100px 0 12px 0; text-transform: uppercase;\">Question 10<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 28px 0;\">What becomes of the money it raises?<\/h2>\n<div style=\"margin: 0 0 30px 0; padding: 0 0 16px 0; border-bottom: 1px solid #1a1a1a;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.2em; color: #daa241; font-weight: 700; margin: 0 0 8px 0; text-transform: uppercase;\">Primary source \u00b7 from the S-1<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 1.6; color: #1a1a1a; margin: 0;\">Use of Proceeds (p.37+), Cover \u2014 from the S-1<\/p>\n<\/div>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 14px; line-height: 1.6; color: #888; letter-spacing: 0.01em; margin: 0 0 1.5em 0; padding: 16px 20px; background: #f5f5f5; border-left: 3px solid #888;\">Note: This analysis draws only on the facts in the S-1. The final IPO price, the listing date, post-listing share performance and trading demand are not in the filing and fall outside its scope.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The IPO plan goes like this.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The implied amount raised is <strong style=\"font-weight: 700; color: #000;\">on the order of <span style=\"white-space:nowrap;\">$5<\/span> billion<\/strong>. At the time, it was on track to be <strong style=\"font-weight: 700; color: #000;\">the largest Internet IPO to date<\/strong>.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Use of proceeds<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The use is &ldquo;working capital and other general corporate purposes.&rdquo;<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">No specific projects (so many dollars for mobile development, so many for <span style=\"white-space:nowrap;\">data-center<\/span> expansion) are spelled out. It is &ldquo;<strong style=\"font-weight: 700; color: #000;\">raise the money, and the company decides where it goes<\/strong>.&rdquo;<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">Not a stopgap, but a <span style=\"white-space:nowrap;\">cash-out<\/span> for the founders<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">Facebook is <strong style=\"font-weight: 700; color: #000;\">already profitable and holds <span style=\"white-space:nowrap;\">$3.9<\/span> billion in cash<\/strong>. More than a need for funding, the offering carries the meaning of <strong style=\"font-weight: 700; color: #000;\">a <span style=\"white-space:nowrap;\">cash-out<\/span> opportunity for founders, early investors, and employees<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">In particular, it is made clear that the offering includes secondary shares from existing holders. The design is for Zuckerberg to retain his voting power while early investors cash out.<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 700; line-height: 1.5; color: #000; margin: 30px 0 16px 0; border-left: 4px solid #daa241; padding: 0 0 0 16px;\">A bet on mobile revenue<\/h3>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">The money raised in the IPO also becomes the capital to fund building a <span style=\"white-space:nowrap;\">mobile-advertising<\/span> methodology. &ldquo;<strong style=\"font-weight: 700; color: #000;\">Buying time with money to solve zero mobile revenue<\/strong>&rdquo; &mdash; that is the essential meaning of Facebook&rsquo;s 2012 IPO.<\/p>\n<div style=\"margin: 30px 0;\">\n<table class=\"s1-body-table\" style=\"width: 100%; table-layout: fixed; border-collapse: collapse; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 15px; font-variant-numeric: tabular-nums;\">\n<thead>\n<tr style=\"border-top: 2px solid #1a1a1a; border-bottom: 1px solid #1a1a1a;\">\n<th style=\"padding: 14px 8px; text-align: left; font-weight: 700; color: #000; word-break: break-word;\">Item<\/th>\n<th style=\"padding: 14px 8px; text-align: left; font-weight: 700; color: #000; word-break: break-word;\">Detail<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Listing<\/td>\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Nasdaq (ticker: FB)<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #e6e6e6;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Assumed price<\/td>\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\"><span style=\"white-space:nowrap;\">$28<\/span>&#8211;<span style=\"white-space:nowrap;\">$35<\/span> (initial <span style=\"white-space:nowrap;\">S-1<\/span>\/A, 2012; final offer price was <span style=\"white-space:nowrap;\">$38<\/span>)<\/td>\n<\/tr>\n<tr style=\"border-bottom: 1px solid #1a1a1a;\">\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Lead underwriters<\/td>\n<td style=\"padding: 14px 8px; text-align: left; word-break: break-word; color: #1a1a1a;\">Morgan Stanley, JPMorgan, Goldman Sachs<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">&ldquo;<strong style=\"font-weight: 700; color: #000;\">Buying time with money to solve zero mobile revenue<\/strong>&rdquo; &mdash; that is the essence of Facebook&rsquo;s IPO.<\/p>\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 12px; letter-spacing: 0.25em; font-weight: 700; color: #daa241; margin: 120px 0 12px 0; text-transform: uppercase;\">In closing<\/p>\n<h2 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: clamp(26px, 5vw, 32px); font-weight: 600; line-height: 1.25; letter-spacing: -0.005em; color: #000; margin: 0 0 20px 0;\">Beyond the ten questions<\/h2>\n<div style=\"width: 140px; height: 4px; background: #daa241; margin: 0 0 40px 0;\"><\/div>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">What Facebook is selling is not merely a &ldquo;social networking service.&rdquo; MAU of 845 million, roughly <span style=\"white-space:nowrap;\">40%<\/span> of the planet&rsquo;s internet population, <span style=\"white-space:nowrap;\">57%<\/span> engagement, more than 70 languages, 250 million photos a day. Revenue up 4.8x in three years, a <span style=\"white-space:nowrap;\">47%<\/span> operating margin, <span style=\"white-space:nowrap;\">$3.9<\/span> billion in cash. <strong style=\"font-weight: 700; color: #000;\">A <span style=\"white-space:nowrap;\">real-name<\/span> social graph of 800 million people that no one else can replicate<\/strong>.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">But that <span style=\"white-space:nowrap;\">S-1<\/span> states, &ldquo;<strong style=\"font-weight: 700; color: #000;\">We do not currently directly generate any meaningful revenue from the use of Facebook mobile products<\/strong>.&rdquo; More than half of all users come from mobile, yet ad revenue there is zero. It discloses this in the Risk Factors as its biggest risk. Zynga alone is <span style=\"white-space:nowrap;\">12%<\/span> of total revenue, and a revision of the EU Data Protection Directive (stronger privacy regulation) looms overhead.<\/p>\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0 0 1.5em 0;\">And the <span style=\"white-space:nowrap;\">27-year-old<\/span> founder, Mark Zuckerberg, <strong style=\"font-weight: 700; color: #000;\">holds <span style=\"white-space:nowrap;\">55.8%<\/span> of the voting power by himself<\/strong>, through <span style=\"white-space:nowrap;\">Class B<\/span> stock at 10 votes per share plus proxies. The election of directors and the sale of the company can both be decided by Zuckerberg alone. The <span style=\"white-space:nowrap;\">S-1<\/span> itself warns that &ldquo;this concentrated control will limit your ability to influence corporate matters.&rdquo; Eight years out of Harvard, he heads into the largest Internet IPO to date.<\/p>\n<\/div>\n<div style=\"max-width: 720px; margin: 80px auto; padding: 0 20px;\">\n<div class=\"s1-light-shadow\" style=\"display: flex; align-items: stretch;\">\n<div style=\"flex: 1 1 0; min-width: 0; box-sizing: border-box; border: 1px solid #1a1a1a; overflow-wrap: break-word; background: #ffffff; display: flex; flex-direction: column;\">\n<div style=\"background: #c4922e; padding: 20px 28px; text-align: center;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 10px; letter-spacing: 0.25em; color: rgba(255,255,255,0.7); font-weight: 700; margin: 0 0 4px 0;\">LIGHT<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 600; color: #ffffff; margin: 0;\">The bull case<\/h3>\n<\/p><\/div>\n<div style=\"padding: 28px; background: #ffffff; flex: 1;\">\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 16px; line-height: 1.65; color: #1a1a1a; margin: 0; overflow-wrap: break-word;\"><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; margin:0 0 0.6em 0;\">&middot; MAU of 845 million, 250 million photos a day, over 100 billion friend connections.<\/span><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; margin:0 0 0.6em 0;\">&middot; Revenue up 4.8x in three years ($777M -> $3,711M), a 47% operating margin, $1B net income, $3.9B in cash.<\/span><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; margin:0 0 0.6em 0;\">&middot; The real-name social graph cannot be replicated; 7 million apps integrate Facebook Platform.<\/span><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; margin:0;\">&middot; Sheryl Sandberg brings ad targeting over from Google.<\/span><\/p>\n<\/p><\/div>\n<\/p><\/div>\n<div style=\"flex: 1 1 0; min-width: 0; box-sizing: border-box; border: 1px solid #1a1a1a; border-left: 0; overflow-wrap: break-word; background: #ffffff; display: flex; flex-direction: column;\">\n<div style=\"background: #1a1a1a; padding: 20px 28px; text-align: center;\">\n<p style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 10px; letter-spacing: 0.25em; color: rgba(255,255,255,0.5); font-weight: 700; margin: 0 0 4px 0;\">SHADOW<\/p>\n<h3 style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 22px; font-weight: 600; color: #ffffff; margin: 0;\">The bear case<\/h3>\n<\/p><\/div>\n<div style=\"padding: 28px; background: #ffffff; flex: 1;\">\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 16px; line-height: 1.65; color: #1a1a1a; margin: 0; overflow-wrap: break-word;\"><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; margin:0 0 0.6em 0;\">&middot; Mobile MAU of 425 million, yet zero ad revenue there.<\/span><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; margin:0 0 0.6em 0;\">&middot; The S-1 discloses, as its biggest risk, a structure in which the shift to mobile stalls revenue.<\/span><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; margin:0 0 0.6em 0;\">&middot; Zynga alone is about 12% of total revenue.<\/span><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; margin:0 0 0.6em 0;\">&middot; Class B at 10 votes per share plus proxies give 55.8% voting power; director elections and a sale can be decided by Zuckerberg alone.<\/span><span style=\"display:block; padding-left:1.2em; text-indent:-1.2em; margin:0;\">&middot; Privacy regulation (a revision of the EU Data Protection Directive) looms overhead.<\/span><\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/div>\n<div style=\"max-width: 720px; margin: 0 auto; padding: 0 20px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; color: #1a1a1a; overflow-wrap: break-word; text-wrap: pretty;\">\n<p style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 20px; line-height: 1.65; letter-spacing: 0; color: #1a1a1a; margin: 0;\">The <span style=\"white-space:nowrap;\">S-1<\/span> writes that it will &ldquo;make the world more open and connected.&rdquo; The market expects &ldquo;the winner of the great migration of advertising from online to social to mobile.&rdquo; At the intersection of the two, Facebook sells stock. It is the moment a <span style=\"white-space:nowrap;\">27-year-old<\/span> founder heads into the largest Internet IPO to date, still carrying the bomb of zero mobile revenue.<\/p>\n<\/div>\n<p><!--s1nl--><\/p>\n<div class=\"s1-nl\" id=\"s1nl-en\" style=\"max-width:680px;margin:70px auto 0;padding:30px;border:1px solid #e6e6e6;background:#ffffff;font-family:'Helvetica Neue', Helvetica, Arial, 'Hiragino Kaku Gothic ProN', '\u30d2\u30e9\u30ae\u30ce\u89d2\u30b4 ProN W3', 'Noto Sans JP', 'Yu Gothic', sans-serif;word-break:keep-all;line-break:strict;box-sizing:border-box;\">\n<p style=\"font-size:12px;letter-spacing:0.25em;font-weight:700;color:#daa241;margin:0 0 10px;\">S-1 JOURNAL NEWSLETTER<\/p>\n<div style=\"font-size:20px;font-weight:700;line-height:1.6;color:#1a1a1a;margin:0 0 10px;\">When the next S-1 drops, get the reality check.<\/div>\n<p style=\"font-size:14px;line-height:1.8;color:#333333;margin:0 0 20px;\">Event-driven S-1 breakdowns and new deep dives, delivered free by email. Subscriber bonus: the Ten Questions checklist (PDF). No spam. Unsubscribe anytime.<\/p>\n<form action=\"https:\/\/tomorrowaccess.com\/wp-json\/s1\/v1\/waitlist\" method=\"post\" onsubmit=\"return s1nlSubmit_en(this)\" style=\"display:flex;gap:10px;flex-wrap:wrap;margin:0;\"><input type=\"hidden\" name=\"source\" value=\"s1nl-en-nojs\"><input type=\"email\" name=\"email\" required placeholder=\"Your email\" style=\"flex:1;min-width:200px;padding:13px 16px;font-size:15px;font-family:inherit;border:1px solid #e6e6e6;background:#fafafa;color:#000000;border-radius:0;box-sizing:border-box;\"><button type=\"submit\" style=\"background:#daa241;color:#ffffff;border:0;border-radius:0;padding:13px 28px;font-size:14px;font-weight:700;letter-spacing:0.08em;font-family:inherit;cursor:pointer;\">Subscribe free<\/button><\/form>\n<p style=\"font-size:11px;color:#999999;line-height:1.7;margin:10px 0 0;\">By subscribing you agree to receive emails from S-1 Journal.<\/p>\n<p><script>function s1nlSubmit_en(f){var b=f.querySelector(\"button\");b.disabled=true;var em=(f.querySelector(\"input[type=email]\").value||\"\").trim();fetch(f.action,{method:\"POST\",headers:{\"Content-Type\":\"application\/json\"},body:JSON.stringify({email:em,source:location.pathname})}).then(function(r){return r.json()}).then(function(j){if(j&&j.ok){document.getElementById(\"s1nl-en\").innerHTML=\"<\/p>\n<p style=\\\"font-size:16px;font-weight:700;color:#1a1a1a;margin:0;\\\">\u2713 You're in. See you at the next S-1.<\/p>\n<p>\";}else{b.disabled=false;alert(\"Something went wrong. Please try again later.\");}}).catch(function(){b.disabled=false;alert(\"Something went wrong. Please try again later.\");});return false;}<\/script><\/div>\n<p><!--\/s1nl--><\/p>\n<div style=\"background: #000000; padding: 80px 40px; text-align: center; margin-top: 80px;\">\n<div class=\"s1-article-cta-headline\" style=\"font-family: 'Newsreader', Georgia, 'Times New Roman', serif; font-size: 32px; font-weight: 400; color: #fafafa; line-height: 1.5; text-wrap: pretty;\">A great company, or a mediocre one?<br \/>That judgment is now in your hands.<\/div>\n<div style=\"width: 240px; height: 4px; background: #daa241; margin: 30px auto 0;\"><\/div>\n<\/div>\n<div style=\"max-width: 720px; margin: 40px auto 0; padding: 0 20px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif;\">\n<p style=\"font-size: 12px; line-height: 1.7; color: #888; letter-spacing: 0.02em; margin: 0;\">Source: All facts are drawn from Facebook, Inc.&#8217;s S-1 (accession 0001193125-12-034517, filed 2012-02-01), together with the company&#8217;s IPO roadshow presentation and factsheet where noted.<\/p>\n<\/div>\n<div style=\"max-width: 720px; margin: 16px auto; padding: 0 20px;\"><a href=\"https:\/\/tomorrowaccess.com\/en\/s-1-journal\/\" style=\"font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 16px; font-weight: 700; color: #daa241; text-decoration: none; letter-spacing: 0.02em;\">\u2190 Back to S-1 Journal<\/a><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>S-1 Journal The 10 Questions | Every S-1, decoded through the same 10 questions. Facebook One in Eight People  [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":24389,"parent":20744,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"_yoast_wpseo_focuskw":"Facebook S-1","_yoast_wpseo_title":"Facebook S-1, Explained: 845M Users, Zero Mobile Revenue %%sep%% %%sitename%%","_yoast_wpseo_metadesc":"Facebook&rsquo;s 2012 S-1, decoded through 10 questions: 845M monthly users, a 47% operating margin, $3.9B in cash &mdash; yet zero mobile ad revenue, and a 27-year-old founder with 55.8% of the vote.","_yoast_wpseo_canonical":"","_yoast_wpseo_opengraph-title":"","_yoast_wpseo_opengraph-description":"","_yoast_wpseo_twitter-title":"","_yoast_wpseo_twitter-description":"","_uag_custom_page_level_css":"","eventcal-data-date-start":"","eventcal-data-date-end":"","eventcal-data-url":"","eventcal-data-place":"","eventcal-data-capacity":"","eventcal-data-ticket":"","eventcal-data-report":"","eventcal-data-note":"","mentoring-company":"","mentoring-position":"","mentoring-name":"","mentoring-url":"","mentoring-text-top":"","mentoring-text-01":"","mentoring-text-02":"","mentoring-text-03":"","mentoring-images":"","mentoring-logo":"","expert-pitch-data-thumbnail":"https:\/\/www.youtube.com\/embed\/M7DlaXKYhLw","expert-pitch-data-youtube":"","expert-pitch-data-date":"2022.03.01 TUE 12:00-13:00","expert-pitch-data-name":"Global Brain, Partner US office \u4e00\u5bae \u7fd4\u5e73\u6c0f","expert-pitch-data-excerpt":"\u91d1\u878d\u5e02\u5834\u304c\u5927\u304d\u304f\u5909\u308f\u308d\u3046\u3068\u3057\u3066\u3044\u307e\u3059\u3002 \u3053\u308c\u307e\u3067\u306f\u65e7\u6765\u306e\u9280\u884c\u304c\u307b\u307c\u5168\u3066\u306e\u6a5f\u80fd\u3092\u6301\u3063\u3066\u3044\u307e\u3057\u305f\u304c\u3001\u304a\u91d1\u3092\u8caf\u3081\u308b\u3001\u9001\u91d1\u3059\u308b\u3001\u6c7a\u6e08\u3059\u308b\u3001\u306a\u3069\u306e\u6a5f\u80fd\u304c\u7d30\u5206\u5316\u3057\u3066\u3001\u3055\u307e\u3056\u307e\u306a\u4eba\u304c\u500b\u3005\u306e\u30b5\u30fc\u30d3\u30b9\u3092\u63d0\u4f9b\u3067\u304d\u308b\u6642\u4ee3\u306b\u306a\u308a\u307e\u3057\u305f\u3002 \u3055\u3089\u306bAI\u306e\u6280\u8853\u3084\u81a8\u5927\u306a\u91cf\u3092\u51e6\u7406\u3067\u304d\u308b\u6280\u8853\u3001\u30d6\u30ed\u30c3\u30af\u30c1\u30a7\u30fc\u30f3\u6280\u8853\u306a\u3069\u3082\u6210\u719f\u3057\u3066\u304d\u305f\u3053\u3068\u3082\u3042\u308a\u3001\u305d\u306e\u52d5\u304d\u306f\u52a0\u901f\u3057\u3066\u3044\u307e\u3059\u3002 \u52d5\u304d\u304c\u6fc0\u3057\u3044\u30d5\u30a3\u30f3\u30c6\u30c3\u30af\u306b\u3064\u3044\u3066\u3001\u6295\u8cc7\u304c\u6d3b\u767a\u3067\u3001\u4eca\u5e74\u306f\u30b0\u30ed\u30fc\u30d0\u30eb\u6295\u8cc7\u3068Fintech\u306a\u3069\u306b\u3082\u6ce8\u529b\u3055\u308c\u3066\u3044\u304fGlobal Brain Partner \u4e00\u5bae\u6c0f\u3068\u6700\u65b0\u60c5\u5831\u3092\u304a\u5c4a\u3051\u3057\u307e\u3059\u3002","expert-pitch-data-download-file":"","expert-pitch-data-peatix":"","expert-pitch-data-whitepaper-show":false,"common-label-text":"","_locale":"en_US","_original_post":"https:\/\/tomorrowaccess.com\/?page_id=18796","footnotes":""},"class_list":["post-20604","page","type-page","status-publish","has-post-thumbnail","hentry","en-US"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Facebook S-1, Explained: 845M Users, Zero Mobile Revenue | Tomorrow Access<\/title>\n<meta name=\"description\" content=\"Facebook&rsquo;s 2012 S-1, decoded through 10 questions: 845M monthly users, a 47% operating margin, $3.9B in cash &mdash; 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