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  • irishtimes.com - Posted: September 8, 2011 @ 11:19 pm

    Facebook revenue doubles to $1.6 billion

    Ciara O'Brien

    If you ever needed any proof that social networking is big business, just look at Facebook’s leaked results. $1.6 billion in revenue in the first six months of the year. $1.6 billion. That’s double what it earned last year.

    Net income for the six months came to almost $500 million. It’s impressive, considering just a few years ago we were all wondering how Facebook was ever going to make any money at all.

    And, no, contrary to the occasional Facebook rumour, usually accompanied by lots of capital letters and exclamation points for emphasis, it wasn’t going to be by charging for access to Facebook. Instead the company went down the route of advertising and tie-ins with games publishers.

    Look how it’s all panned out for the site.

    Back in 2006, when Yahoo offered $1 billion for Facebook and was turned down, some may have wondered whether it was the right choice. When Microsoft stumped up $20 million for a tiny stake, valuing the firm at $15 billion, there was debate about over-valuing Facebook.

    And now, analysts are valuing the site at $80 billion.  Mark Zuckerberg must be laughing and doing the “I told you so” dance every night. Possibly on a massive pile of money. And you couldn’t really blame him either.

    The site has clocked up 750 million users – a powerful draw for advertisers, and a potential problem for sites such as Google and Yahoo. Google has already tried to get in on the act with Google+, although it remains to be seen just how popular it will become among legions of entrenched Facebook users.

    It’s inspired a movie, numerous books and created a whole new marketplace for apps.

    Facebook has already outlasted many of the predictions for its shelflife, and continues to gain users. Rivals such as Bebo and MySpace could only dream of reaching the dizzying heights of Facebook’s users figures.  And all this despite the fact that it’s had some pretty negative press about privacy and how it shares its users’ details.

    Not bad for a site that started out in a college dorm.

    • Sam Hamadeh says:


      Thanks for the article. But I respectfully think you should look more closely at the numbers Facebook is leaking out for PR…they’re actually quite negative compared to what they had planned.

      While “Facebook revenue nearly doubles in first half to almost $1.6 million” makes for a nice tidy headline for Reuters (and most likely intentionally leaked with Facebook PR’s encouragement to counter recent news of traffic drops and Google+ traction) I wanted to respectfully invite The Mercury News to do a follow up story looking more closely behind the numbers of Facebook’s financials and see that Facebook actually has badly missed its first half projections of above $2 billion, both internally and those provided to investors via Goldman Sachs in the $1.5 billion stock sale early this year. – a miss of almost $500 million or 25% short of projections. (If Google or any other public co. just announced such a revenue miss it’s stock would be nosediving.)

      Our analysis at PrivCo.com to support our conclusions:
      PrivCo Private Company Financial Research Report: Facebook, Inc.

      Among other things:
      - Hide quoted text -

      1. When Facebook sold stock via Goldman Sachs to investors in January at a $50 billion valuation, it provided internal “conservative projections” in investment documents circulated of “over $4 billion in revenue for 2011″, including at least $2 billion for 1st half 2011. At revenue of under $1.6 billion for the 1st half of 2011 (actually closer to $1.5 according to our sources), revenue will barely exceed $3.2 billion for 2011. Facebook has seriously missed its own revenue forecasts of nearly $2 billion for 1st half 2011 by nearly $500 million, or 25%. (This is consistent with Facebook’s recent first ever traffic drops in its core markets of the U.S., UK, Canada and Australia.) While revenue growth of 90% is impressive in the context of a zero-growth economy, it’s dramatically short of what they planned or promised and inconsistent with the oft-repeated talk of the big “$100 billion IPO”.

      2. Recent stock trading on private markets peaked and is below where it was in February of this year, meaning insiders with intimate knowledge of financial trends have been eager sellers. The most recent private stock transaction on Sharepost was only $3 million worth (.0001% of the company’s stock) at a price of $33, down from $36. And more importantly, to move just 0.2% of the company’s stock via investment banks’ private placement required IPG to take nearly a 20% haircut in price to that, dropping Facebook’s value to barely above $60 billion, a far cry from the nearly $80 billion just a few months ago. (And what does that indicate would happen in an IPO where more a massive 10% or 15% or more of Facebook stock is marketed for sale?)

      We do not believe given such loss of momentum and the new unknown competitive threat from Google+ that a Facebook IPO will occur in spring of 2012 and not even within the next 12 months.

      Here is our research and analysis to back up our conclusions, feel free to quote from it as you wish and/or call or email me if you want any more objective analysis than PR coming from Facebook and/or its VC backers cheerleading the stock:

      PrivCo Private Company Financial Research Report: Facebook, Inc.


      Sam Hamadeh, J.D., M.B.A.
      Chief Executive Officer
      PrivCo.com LLC
      126 Fifth Avenue
      14th Floor
      New York, NY 10011
      email: sam (at) privco.com

    • a662106 says:

      I’ve said that least 662106 times. The problem this like that is they are just too compilcated for the average bird, if you know what I mean