Facebook Files for IPO

(The Wall Street Journal) - Facebook Inc. on Wednesday filed for an initial public offering that could value the company at between $75 billion to $100 billion, putting the eight-year-old social network on track to be one of the biggest web stock market debuts of all time, even as it tries to keep up with sky-high expectations.

In a securities filing , the Menlo Park, Calif., company said it is seeking to raise $5 billion. That figure is a placeholder and will likely change. Facebook hopes to raise as much as $10 billion when it goes public in the spring, said people familiar with the matter.

The company revealed it has been growing fast, but the figures were less than some had expected. Facebook said it produced $3.71 billion in revenue in 2011, up from $1.97 billion a year earlier. Outside estimates had pegged Facebook's revenue for 2011 at $4.27 billion.

In a letter to potential shareholders, Facebook CEO Mark Zuckerberg said he plans to continue focusing on building products, rather than optimizing for revenue growth. "We don't build services to make money; we make money to build better services," he said." These days I think more and more people want to use services from companies that believe in something beyond simply maximizing profits."

Facebook's public debut is one of the most hotly anticipated IPOs in recent years and would put it ahead of Google Inc.'s 2004 offering, which has held the record for the largest US internet IPO by raising $1.9 billion and valuing the company at $23 billion. Facebook's offering is also viewed as a defining moment for the latest Web investing boom.

The social network, which was started by Zuckerberg in 2004 out of his Harvard University dorm room, has reshaped how people share information and interact with others on the Web. In the process, Facebook has spawned new verbs such as "to friend" and a popular Hollywood movie "The Social Network" that detailed the company's origins.

Facebook's growth is slower than some other tech companies that have gone public recently. Yet unlike some other newly public web companies, Facebook is profitable. Facebook's 2011 profit was $1 billion, up 65 percent from the year earlier period. Facebook's revenue is driven by its online advertising business, as big brands rush to the site to interact with consumers through display ads and fan pages.