<<IT WORLD> Facebook heads for
IPO By Martin J
Young
HUA HIN, Thailand - After many months
of rumor and speculation, social networking giant
Facebook has filed for its initial public offering
with the US Securities and Exchange Commission.
The documents, filed on Wednesday, noted that the
company is expected to be valued at between US$80
and $100 billion with a target of raising $5
billion from the share sale.
Stock pricing
has yet to be announced as has the actual date of
the offering; reports indicate that it could be as
early as May.
The documents reveal a
number of statistics regarding revenue and current
company shareholder structure, of which
co-founder, chairman, and chief executive Mark
Zuckerberg holds 28% - but proxy agreements with
fellow stockholders potentially give him voting
control over more than half the shares. The 27-year-old
could hold stock worth
$28 billion if the targets of the IPO are met.
Potential investors got their first glimpses of
profits this week - the company made $1 billion
from a total revenue of $3.7 billion in 2011 - up
88% on 2010.
Over 85% of this profit is
derived from its lucrative targeted advertising
model. Facebook knows what people like, so it can
show them ads for similar products - those ads are
far more likely to be clicked by its burgeoning
member base of 840 million, hence advertisers will
pay a premium for them. Every time someone clicks
a Facebook "like" button, the company's member
data library gets a little bigger along with its
profits.
Google is following a similar
pattern by harvesting more user data so that it
can offer more relevant ads to people, the company
announced a change in privacy policy last week.
(See Big
Brother wants more, Asia Times online, January
28, 2012.)
Facebook also made money from
online gaming such as the popular Farmville,
developed by Zynga. The game allows users to
create their own virtual empires and trade with
friends online via the social network. Around 12%
of its total revenue comes from online social
gaming.
Current stock holders are set to
get richer, a lot richer - investors who put money
into the startup seven years ago could receive a
thousand-fold return on some of their investment.
Even a graffiti artist who took stock instead of
cash for painting the walls of the company's first
headquarters in 2005 could be worth over $200
million.
So what will Facebook do with all
of this extra cash? Get bigger. It wants to be the
Google of the future, a one-stop Internet portal
for communication and sharing information, all
based upon personal details, preferences, and
information that users give it. Just like Google,
it will have a tough time balancing privacy and
profit now that the financials have been revealed;
a lot of cash is flowing around and that does not
happen without attracting attention.
Internet Web censorship in Asia
is on the increase, more so now that Twitter
announced that it will change its policies to
allow censorship by country. Messages on the
website, or Tweets, could be removed to viewers in
particular countries should the respective
government request it. Twitter had previously been
seen as an open platform allowing freedom of
speech and one that has been considered by some as
playing an important role in a number of public
uprisings against oppressive Middle East regimes.
Thailand is the first country to publicly
endorse Twitter's new censorship policies;
Information and Communication Technology Minister
Jeerawan Boonperm called the decision a "welcome
development". Expressing views that may insult the
monarchy can draw lengthy jail terms for Thais and
foreign nationals. Internet censorship is on the
rise in Thailand, which ranked at 153 out of 178
in the Reporters Without Borders' 2010/11 Press
Freedom Index.
China also welcomed the
move, though Twitter is at present blocked in its
entirety in the country and users need to access
external networks to view the site.
Industry Samsung notched up a
victory this week in its ongoing battle with
Apple, which has hounded the company across the
globe issuing lawsuits over the design of its
tablets and smart-phones. A German court rejected
Apple's appeal for a ban on the Samsung Galaxy
10.1N tablet and Galaxy Nexus mobile phone within
the country. To get around previous Apple-incited
product bans, Samsung re-modeled the device, which
has been on the market since November last year.
Samsung, however, is not out of the woods
yet; the European Union has started its own
investigation into the Korean electronics giant
for patent use that might break EU antitrust
regulations. Standards-essential patent use, which
is the focus of the investigation, covers an area
that is crucial to compliance with an industry
standard. It has been alleged that Samsung has
been using these special patents to distort the
market.
Science Astronomers
announced an exciting find this week when they
discovered an Earth-like planet just 22 light
years from our own. Using public data from the
European Southern Observatory, the scientists
found at least one and as many as three planets
sitting in the habitable zone orbiting an M-class
dwarf star called GJ 667C.
The habitable
zone describes an area with the right conditions
for harboring water, not so close to the star that
the water boils away and not too distant for it to
freeze. The newly discovered planet is 4.5 times
the mass of Earth and orbits the star every 28
days, meaning that a year there is approximately
equivalent to a month here.
Martin J
Young is an Asia Times Online correspondent
based in Thailand.
(Copyright 2012
Asia Times Online (Holdings) Ltd. All rights
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