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January 06, 2011, 8:25 PM EST
By Brian Womack
Jan. 6 (Bloomberg) -- Facebook Inc. plans to start reporting its financial results by April 2012, even if it hasn’t held an initial public offering, according to a document sent to prospective investors.
The company would be forced to make the disclosures because it expects to have 500 or more shareholders by the end of this year, a threshold that makes reporting results necessary under U.S. Securities and Exchange Commission rules, said a person who reviewed the document. The person declined to be identified because the matter hasn’t been made public.
Facebook, the top social-networking site, is gaining attention from investors because of its surging user numbers and advertising revenue. Goldman Sachs Group Inc. and funds managed by the firm have invested $450 million in Facebook, according to an offering document sent to investors. Goldman Sachs also has an arrangement to let clients make additional investments totaling as much as $1.5 billion.
Facebook, once expected to go public this year, plans to push that off until 2012, people with knowledge of the company said last year. Larry Yu, a spokesman for Palo Alto, California- based Facebook, and Stephen Cohen, a Goldman Sachs spokesman in New York, declined to comment.
Facebook released some sales and profit information as part of the document sent to Goldman Sachs clients. The company had $1.2 billion in revenue and $355 million in profit during the first nine months of 2010, according to the person. That compares with sales of $777 million and profit of more than $200 million in all of 2009.
Advertising Growth
Much of the money is generated by ads. Facebook took about 9.4 percent of the display-advertising market in the U.S. last year, up from 6.6 percent in 2009, according to estimates from EMarketer Inc. in New York. Yahoo! Inc., which leads the market, grabbed about 16.2 percent, down from 16.5 percent. Google Inc., which is stronger in search ads, had 6.7 percent, up from 4.7 percent, EMarketer projects.
The offering document also showed that $75 million of the $450 million investment is coming from Goldman Sachs Investment Partners, a hedge fund that handles client money. The firm’s own $375 million investment will probably be cut to $300 million because Goldman Sachs expects to sell $75 million to third parties or to the fund it created so clients could buy a stake in Facebook.
The investment, which accompanied a $50 million infusion from Russia’s Digital Sky Technologies, valued Facebook at $50 billion, according to people familiar with the matter.
The Wall Street Journal and the New York Times reported earlier on portions of the investor document.
--With assistance by Christine Harper in New York. Editors: Nick Turner, Jillian Ward
To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
Online Business Consulting | Internet Business Consulting
Jan. 6 (Bloomberg) -- Facebook Inc. plans to start reporting its financial results by April 2012, even if it hasn’t held an initial public offering, according to a document sent to prospective investors.
The company would be forced to make the disclosures because it expects to have 500 or more shareholders by the end of this year, a threshold that makes reporting results necessary under U.S. Securities and Exchange Commission rules, said a person who reviewed the document. The person declined to be identified because the matter hasn’t been made public.
Facebook, the top social-networking site, is gaining attention from investors because of its surging user numbers and advertising revenue. Goldman Sachs Group Inc. and funds managed by the firm have invested $450 million in Facebook, according to an offering document sent to investors. Goldman Sachs also has an arrangement to let clients make additional investments totaling as much as $1.5 billion.
Facebook, once expected to go public this year, plans to push that off until 2012, people with knowledge of the company said last year. Larry Yu, a spokesman for Palo Alto, California- based Facebook, and Stephen Cohen, a Goldman Sachs spokesman in New York, declined to comment.
Facebook released some sales and profit information as part of the document sent to Goldman Sachs clients. The company had $1.2 billion in revenue and $355 million in profit during the first nine months of 2010, according to the person. That compares with sales of $777 million and profit of more than $200 million in all of 2009.
Advertising Growth
Much of the money is generated by ads. Facebook took about 9.4 percent of the display-advertising market in the U.S. last year, up from 6.6 percent in 2009, according to estimates from EMarketer Inc. in New York. Yahoo! Inc., which leads the market, grabbed about 16.2 percent, down from 16.5 percent. Google Inc., which is stronger in search ads, had 6.7 percent, up from 4.7 percent, EMarketer projects.
The offering document also showed that $75 million of the $450 million investment is coming from Goldman Sachs Investment Partners, a hedge fund that handles client money. The firm’s own $375 million investment will probably be cut to $300 million because Goldman Sachs expects to sell $75 million to third parties or to the fund it created so clients could buy a stake in Facebook.
The investment, which accompanied a $50 million infusion from Russia’s Digital Sky Technologies, valued Facebook at $50 billion, according to people familiar with the matter.
The Wall Street Journal and the New York Times reported earlier on portions of the investor document.
--With assistance by Christine Harper in New York. Editors: Nick Turner, Jillian Ward
To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
Online Business Consulting | Internet Business Consulting