After years of speculation and three months after Facebook officially registered to go public, the social giant has set a pricing range on its highly anticipated IPO, set to take place on place on May 18th according to industry watchers. Facebook shares will be priced at $28 to $35 when it goes public, according to […]
After years of speculation and three months after Facebook officially registered to go public, the social giant has set a pricing range on its highly anticipated IPO, set to take place on place on May 18th according to industry watchers.
Facebook shares will be priced at $28 to $35 when it goes public, according to documents filed with the SEC, resulting in a record-setting valuation of up to $96 billion. Facebook expects the IPO to pad its war chest by $5.6 billion, assuming a split-the-difference price of $31.50 per share.
Founder and CEO Mark Zuckerberg’s stake in the company may be worth as much as $18.7 billion when the stock begins trading, according to the Wall Street Journal. After the IPO, he will retain control over Facebook’s fate with roughly 57 percent of shareholder voting power.
Despite an public offering that stands to eclipse the Wall Street debut of any American company, including Google’s IPO in 2004, Facebook warns that a turbulent technology market — one that’s being roiled by a flood of mobile devices and services — could lead to a reversal of fortune.
In terms of reach and engagement, Facebook is the envy of the industry. The company reported to the SEC that as of March 2012, it had 526 million daily active users on average, a 41 percent increase over the 372 million daily active users it logged in March 2011.
Facebook had 901 million active users as of March 31, 2012 — 488 million of which used its mobile products to connect with the service. And the company expects its mobile user base to keep growing and present a challenge, that by its own admission, may prove tricky to navigate.
In its latest SEC filing, Facebook wrote, “Growth in use of Facebook through our mobile products, where our ability to monetize is unproven, as a substitute for use on personal computers may negatively affect our revenue and financial results.”
Advertising is Facebook’s primary moneymaker. In the quarter ending March 31, 2012, the company booked over $1 billion in revenues, compared to $731 during the same period a year ago. After tax net income was $205 million in the quarter ending March 31, 2012 versus $233 million last year, indicating that a less robust mobile advertising platform is starting to eat into its margins.
Compared to the desktop browser experience, Facebook currently employs a light touch when it comes to advertising to its mobile users. While it’s experimenting with ways to make its mobile products more advertiser friendly, there is no guarantee it will succeed.
Facebook writes, “we do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven. Accordingly, if users increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected.”
Even if Facebook succeeds in mobile advertising, factors beyond its control could negatively impact the company.
“We are dependent on the interoperability of Facebook with popular mobile operating systems that we do not control, such as Android and iOS, and any changes in such systems that degrade our products’ functionality or give preferential treatment to competitive products could adversely affect Facebook usage on mobile devices,” states Facebook.
Given how quickly mobile platforms are evolving — not to mention the whims of network carriers — it’s a valid concern.
Pedro Hernandez is a contributing editor at InternetNews.com, the news service of the IT Business Edge Network, the network for technology professionals. Follow him on Twitter @ecoINSITE.
Ethics and Artificial Intelligence: Driving Greater Equality
FEATURE | By James Maguire,
December 16, 2020
AI vs. Machine Learning vs. Deep Learning
FEATURE | By Cynthia Harvey,
December 11, 2020
Huawei’s AI Update: Things Are Moving Faster Than We Think
FEATURE | By Rob Enderle,
December 04, 2020
Keeping Machine Learning Algorithms Honest in the ‘Ethics-First’ Era
ARTIFICIAL INTELLIGENCE | By Guest Author,
November 18, 2020
Key Trends in Chatbots and RPA
FEATURE | By Guest Author,
November 10, 2020
FEATURE | By Samuel Greengard,
November 05, 2020
ARTIFICIAL INTELLIGENCE | By Guest Author,
November 02, 2020
How Intel’s Work With Autonomous Cars Could Redefine General Purpose AI
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
October 29, 2020
Dell Technologies World: Weaving Together Human And Machine Interaction For AI And Robotics
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
October 23, 2020
The Super Moderator, or How IBM Project Debater Could Save Social Media
FEATURE | By Rob Enderle,
October 16, 2020
FEATURE | By Cynthia Harvey,
October 07, 2020
ARTIFICIAL INTELLIGENCE | By Guest Author,
October 05, 2020
CIOs Discuss the Promise of AI and Data Science
FEATURE | By Guest Author,
September 25, 2020
Microsoft Is Building An AI Product That Could Predict The Future
FEATURE | By Rob Enderle,
September 25, 2020
Top 10 Machine Learning Companies 2021
FEATURE | By Cynthia Harvey,
September 22, 2020
NVIDIA and ARM: Massively Changing The AI Landscape
ARTIFICIAL INTELLIGENCE | By Rob Enderle,
September 18, 2020
Continuous Intelligence: Expert Discussion [Video and Podcast]
ARTIFICIAL INTELLIGENCE | By James Maguire,
September 14, 2020
Artificial Intelligence: Governance and Ethics [Video]
ARTIFICIAL INTELLIGENCE | By James Maguire,
September 13, 2020
IBM Watson At The US Open: Showcasing The Power Of A Mature Enterprise-Class AI
FEATURE | By Rob Enderle,
September 11, 2020
Artificial Intelligence: Perception vs. Reality
FEATURE | By James Maguire,
September 09, 2020
Pedro Hernandez is a contributor to Datamation, eWEEK, and the IT Business Edge Network, the network for technology professionals. Previously, he served as a managing editor for the Internet.com network of IT-related websites and as the Green IT curator for GigaOM Pro.
Datamation is the leading industry resource for B2B data professionals and technology buyers. Datamation's focus is on providing insight into the latest trends and innovation in AI, data security, big data, and more, along with in-depth product recommendations and comparisons. More than 1.7M users gain insight and guidance from Datamation every year.
Property of TechnologyAdvice. © 2025 TechnologyAdvice. All Rights Reserved
Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.
