Facebook scores $1.20 profit per user
IPO filing reveals social network made $1.20 profit per user last year
Social networking giant Facebook recorded $1 billion in profit on revenues totalling $3.7 billion last year, according to an IPO document received by the US Securities and Exchange Commission (SEC) yesterday.
Based on the site's user base of 850 million, this means that Facebook scored approximately $1.20 in profit per user in 2011.
The company makes about 85% of its cash through targeted online advertising and the rest through online micro-payments for games and other services.
The IPO filing, which aims to raise at least $5 billion, disclosed that Facebook has ramped up the amount it spends on research and development from $144 million in 2010 to $388 million in 2011.
However, the document showed that between the start of 2009 and the end of 2011 Facebook's profit margin slipped. In 2009, it stood at 29.5% of overall revenue, but by the close of last year it had fallen to 26.9%.
Facebook posted revenues of $777 million and $1.97 billion in 2009 and 2010, respectively.
The document also shed light on the company's attempts to enter the Chinese market, which is home to nearly 500 million internet users. Access to Facebook in the country is currently restricted by China's government.
"We do not know if we will be able to find an approach to managing content and information that will be acceptable to us and to the Chinese government," the document read. Elsewhere, it states that Facebook will "continue to evaluate entering China".
The IPO, one the most anticipated in recent US corporate history, aims to raise between $5 billion and $10 billion. The company is expected to make its market debut midway through this year. It will be listed on either the NASDAQ or New York Stock Exchange with the ticker symbol FB.
The filing revealed that CEO and founder Mark Zuckerberg will retain control of about 28% of Facebook shares and retain 56.9% of voting shares.
Based on the $29.76 per share valuation on 31 December 2011, Zuckerberg's stake in Facebook is worth approximately $16 billion.