AllThingsD » IPO

Facebook Gives Its Ads a Boost, Using Your Photos

Peter Kafka — Thu, 09 Feb 2012 22:58:10 +0000

Facebook is the world’s biggest photo-sharing service. And now, as the company prepares to go public, it’s looking to make a bit more money from all of that sharing, via a newly designed photo-viewer that gives ads much more prominence.

The photo-viewer started rolling out earlier this month, and appears to have been implemented widely in the last few days. Plenty of folks have noted that it’s similar to the format Google uses in Google+. I think the ad treatment is much more interesting.

Here’s the old format, via a Huffington Post screenshot:

And here’s the new one:

Those screenshots give you some idea of the new prominence the ads get, but it’s even more obvious in real life. Put it this way: I look at Facebook a lot, and I didn’t even realize that Facebook had been showing me ads when I clicked on photos. Now I can’t avoid them.

For now, that is. Entirely possible that I’ll develop the same “banner blindness” that I have for lots of other Web ads.

Also worth noting that these ads only seem to show up on photos that don’t have many comments on them. Photos that do have lots of comments display those comments instead. So if you’re looking at, say, pictures posted by Mark Zuckerberg, you won’t end up seeing ads next those images at all.

I asked Facebook reps for comment, and they offered a boilerplate response: “We’re constantly testing new designs and layouts on Facebook.”

So I’ll take the liberty of adding what they might say — if they had a beer or two and weren’t talking to a reporter: “See? This is one reason why you guys should trust us when we explain that we’re in the early stages of social advertising. If this format works, it means we’ll have opened up a huge slug of real estate we weren’t using. Boom! Instant revenue stream! And it’s also why you should just chill out about the fact that we don’t yet make any money from mobile. Of course we’re going to figure out how to put ads on your iPhone! We just haven’t gotten around to it yet.”

Thanks, imaginary slightly tipsy Facebook rep! Look forward to chatting with you again soon.

Caesars IPO Hits Jackpot

Tricia Duryee — Wed, 08 Feb 2012 17:55:29 +0000

Caesars Entertainment stock popped 82 percent on the first day of its public offering, trading at $16.39 a share. The Las Vegas company sold only 1.8 million shares, at a price of $9 each. Caesars, known for its casinos, is also betting on new online initiatives, such as social and real-money gaming. The IPO will provide an exit for some of its investors, who paid $28 billion to take it private four months ago. Because of its debt balance of $22 billion, some analysts view the deal as unattractive.

What Zuckerberg Could Do With His Facebook Fortune (Comic)

Nitrozac and Snaggy — Wed, 08 Feb 2012 00:40:30 +0000

Here is the latest comic from our Joy of Tech friends at Geek Culture, Nitrozac and Snaggy. Joy of Tech appears three times a week in the Voices section of this site.

California Pension Fund Challenges Facebook Over Board

John Letzing and Joann S. Lublin — Wed, 08 Feb 2012 00:25:47 +0000

A large California pension fund has challenged Facebook Inc. over what it sees as a lack of diversity on the company’s board of directors, just days after the social-networking firm filed papers to go public in a closely watched IPO.

In a letter addressed to Facebook Chief Executive Mark Zuckerberg on Tuesday, California State Teachers’ Retirement System Director of Corporate Governance Anne Sheehan wrote that, “We are disappointed that the Facebook board will not have any woman members.”

Read the rest of this post on the original site »

Tidbits From the Facebook IPO Filing: I'll Have What SV VCs Marc Andreessen and Jim Breyer Are Having!

Kara Swisher — Mon, 06 Feb 2012 21:44:15 +0000

Because I am an obessive-compulsive and Facebook is my new target of stalkery, I have re-read its IPO filing from earlier this week about nine times so far.

It’s chock full of interesting little bits of tasty info about the Silicon Valley social networking giant that I plan to shine a little more light on this week.

First up is not exactly a news flash: Besides graphic artists, VCs also clean up in the public offering docs.

But I am not talking about the variety of venture firms with their fingers in Facebook, which run the gamut from Accel Partners to DST Global and more.

I am talking about individual wins for venture capitalists, most especially Accel’s Jim Breyer and Marc Andreessen of Andreessen Horowitz.

According to the filing, while Accel holds almost 190 million shares, Breyer himself holds 11.7 million shares personally in the “James W. Breyer 2005 Trust dated March 25, 2005.”

Depending on what Facebook’s valuation turns out to be, based on current estimates, that hovers around $300 million. One caveat, according to the filing, is that 10.4 million of those shares — which are currently Class B stock and will be converted to Class A stock — are “subject to a voting agreement in favor of Mr. Zuckerberg.” That would be CEO and co-founder Mark Zuckerberg, who controls the company via such arrangements.

Not so the shares of super-VC Marc Andreessen, whose firm holds 3.6 million shares. But he himself has 5.2 million restricted stock units, presumably for board service and other advisory duties to Facebook. That’s a possible $125 million or more windfall.

Other board members have also gotten RSUs, but not in that large an amount. Washington Post head Don Graham holds one million of them, while Washington, D.C. political vet Erskine Bowles and Netflix’s Reed Hastings each clock in at only 20,000 each.

That’s a big delta, of course, which means it’s good times for VCs in Silicon Valley, both professionally and personally.

Yahoo Starts Making Wish List, as Asian Deal Huffs to Finish Line and Board Changes Readied

Kara Swisher — Mon, 06 Feb 2012 13:45:26 +0000

Let’s be clear on the much-awaited Asian deal that Yahoo and its Asian partners have been working on: While it is certainly still moving forward, once signed, it will not actually officially close until next year.

Yes, that’s right — 2013!

Still, what everyone and his investor is waiting for is the splashy announcement of the agreement, which involves the Silicon Valley Internet giant, China’s Alibaba Group and SoftBank, a large shareholder in Yahoo Japan.

Yahoo leadership has been hoping that could happen before Feb. 24, an important date after which activist shareholder Daniel Loeb could begin to mount a proxy fight against the current board.

And while the definitive agreement — involving the sale of Yahoo’s 33 percent stake in Alibaba and 35 percent stake in Yahoo Japan — has been moving back and forth among the dealmakers, one source said its completion might take a little longer than that, perhaps even into mid-March.

“It is one of the most complicated cross-border transactions in a long time,” said one person close to the situation. “It’s three different languages, three time zones and three companies that have not always seen eye to eye.”

It’s not that the companies don’t have the top talent on the effort. For Yahoo, it is CFO Tim Morse (who most recently also warmed the CEO seat, until Scott Thompson’s recent appointment); for Alibaba, it’s CEO Jack Ma and CFO Joe Tsai; and, for SoftBank, it is top man Masa Son and his top man Ron Fisher.

To make things even more complex, at the same time as the negotiating is going on, the trio also has to pay mind to how the Internal Revenue Service in the U.S. is going to view the whole deal.

As you can see here from a Wall Street Journal chart, it’s a pretty complicated “cash-rich split-off” to avoid taxes.

While the IRS cannot take an application for a “private letter ruling” until it has an actual agreement in hand, and will not issue one on a hypothetical transaction, the agreement still must be crafted so it is most likely to pass muster.

And only then can anyone move on to the many billions of dollars that Yahoo will instruct Alibaba and SoftBank to pay or contribute in kind for the asset part of the arrangement.

As the Journal noted, in more clarity than I ever could: “A key part of satisfying tax-code requirements is that the company shedding its shares get assets, not just cash, in exchange for them. Cash can’t account for more than two-thirds of the transferred value, tax rules say. This restriction was adopted in 2005 to limit misuse of the provision.”

While Yahoo’s execs have met about the various possibilities, it is more considering now than anything else.

And although a lot of names have been bandied about — Weather Channel, WebMD, as well as Glam Media and even Digg — the more likely direction Yahoo will go in will be different, according to many sources.

First, said sources, the key criteria for the purchase will be to diversify revenue streams, a theme Thompson sounded in his first earnings report recently. That could mean more online commerce, perhaps, rather than advertising or media assets.

Second, said sources, international properties might be more valuable to Yahoo than owning more U.S.-based ones, which opens up a range of interesting possibilities.

This could even include some already held by Alibaba, for example, such as garnering a big stake in its publicly-traded Alibaba.com. Technically, via Alibaba, Yahoo already owns some of the e-commerce giant, but not directly. Another possibility is to get back the Yahoo China business, also now owned by Alibaba.

Third, U.S. companies that Yahoo might look at could be unusual and even bold. Two names brought up in recent internal meetings, for example, were Netflix (before its stock revived) and Yelp (which is prepping for an IPO, and which Yahoo once tried to buy already).

And if things were not already needlessly complex in fixing its Asia problem, expect a change in the Yahoo board composition, too, as early as this week.

As I previously reported, at least four directors are expected to move on. More to the point, there will also be replacements announced at the same time.

To stave off Loeb and even give him a perceptible win, sources said the company is considering announcing the changes sooner than later, with the hope that fresh new members will placate other shareholders.

Lastly, with Thompson starting to take the reins after a month there, I would also expect he’ll weigh in on some significant restructuring (his word, not mine!) at Yahoo soon enough, too.

Complicated? Sure is! Perplexing even? And how! But until Asian and board resolutions, the real work of fixing Yahoo can’t really begin.

Buy, Sell, or Hold Your Belly? (Comic)

Nitrozac and Snaggy — Sat, 04 Feb 2012 00:07:07 +0000

Here is the latest comic from our Joy of Tech friends at Geek Culture, Nitrozac and Snaggy. Joy of Tech appears three times a week in the Voices section of this site.

From the Life-Is-Unfair Files: You're Welcome, Winklevii. Love, Zuck.

Kara Swisher — Fri, 03 Feb 2012 16:40:24 +0000

Persistence — even if it is the whiny, likely undeserved, lunkheaded legal version of it — certainly pays off.

But you have to marvel at the bizarre karma going on, given that my favorite matching pair of digital ottomans, Cameron and Tyler Winklevoss, are poised to collect up to $300 million from the shares they got in a settlement with Facebook and its CEO and co-founder Mark Zuckerberg over the founding of the social networking giant.

That’s right, folks, the rich do get richer, especially if they pursue their case well past the point of shame.

It’s not clear how many of the 1.2 million shares the Winklevii still have from the settlement they got in 2008, since they wrangled with their own lawyers over it, and the stock has also split.

But let’s assume the Olympic rowers kept a chunk, which will be worth a lot of gold-plated oars if Facebook reaches the upward of $80 billion valuation it is expected to in its upcoming initial public offering.

Facebook filed its long-expected IPO earlier this week.

And here’s a lovely tweet about the IPO from Cameron Winklevoss, who is looking very fetching on his Twitter page, even if it is perhaps about time to lose the rower meme image thing, given he’s on the closer side of 30 years old.

He sent it to his twin brother, Tyler, and also to Divya Narendra, their other partner in the ill-fated ConnectU service.

Without going into all the well-gone-over deets (go see the Aaron Sorkin-penned movie and believe about 26 percent of it), ConnectU was the Harvard University dating site that Zuckerberg allegedly submarined in order to start Facebook.

Well, presumably water under bridge — unless you are talking about the perpetually disgruntled Winklevii.

At the time they finally dropped their seven-year fraud lawsuit this past summer, they then reopened to a different one then pending.

“The Social Network 2: The Overly Compensated Vii Strike Back,” anyone?

During the IPO Quiet Period, Please Enjoy the D Stylings of Facebook's Mark Zuckerberg and Sheryl Sandberg (Video)

Kara Swisher — Fri, 03 Feb 2012 00:48:14 +0000

We’ve been fortunate to host Facebook CEO and co-founder Mark Zuckerberg twice on the stage of the D: All Things Digital conference, including one appearance with COO Sheryl Sandberg.

With the blockbuster IPO filing of the social networking giant yesterday — and the ensuing quiet period — both interviews are now most definitely an interesting look-see at the pair who are leading the company.

After Facebook goes public in late May, investors will presumably get more interaction with them both, as well as deeper insight into what makes the company tick.

Until then, here are the videos from the full interviews from 2010′s D8 and 2008′s D6 (unfortunately, for goofy reasons back then, we had to cut these up into four parts).

The interviews cover a wide range of topics, including the then-distant IPO.

[ See post to watch video ]

Google's Punit Soni: We're Not Just Playing Around When It Comes to Social Gaming

Tricia Duryee — Thu, 02 Feb 2012 18:00:34 +0000

After finding out yesterday that games are contributing a staggering amount to Facebook’s top line, we now know exactly how important the category is to the success of Google’s social plans.

Last week, I talked to Punit Soni, who runs games and mobile for Google+, to get an update on Google’s plan for social games. Since the conversation took place before Facebook’s filing, Soni has no direct responses to the numbers.

But he addresses in general how Google expects to challenge Facebook’s dominance in social gaming, and the big opportunity in front of them to do something different.

“There’s no point in being in this game if we are a ‘me-too,’” he said. “We want to be different.”

Yesterday, in Facebook’s IPO filing we learned that substantially all of the company’s payments revenue is coming from virtual goods from inside social games, and that one game publisher alone — Zynga — is contributing 12 percent of the company’s revenue, payments and advertising included.

At those rates, it’s easy to see why Google is emphasizing games and wooing developers to its platform.

It started off with a bang in August, when it launched games. In talking to reporters, Soni announced the company was sharing 95 percent of the revenue from virtual goods with developers, and was keeping only 5 percent for itself.

That was, and remains, much more generous than the 30 percent cut that Facebook takes.

Still, with only 36 games on its network, and far fewer users (however you want to calculate it), Soni was pretty honest about how far they still have to go. He was also extremely enthusiastic, and at times looked as if he wanted to leap out of his chair to get going on some of the projects Google had planned.

First, and foremost, he said they are working hard to get virality right; and second, they want to nail cross-platform, so that games worked seamlessly across the Web and mobile.

Viral channels are the most common way for people to learn about a game, and also one of the most controversial.

More than a year ago, Facebook was forced to dial back those channels, because users complained about receiving too many unwanted messages.

“We err on the side of caution,” Soni said. “We are slowly giving more options to do things.”

Soni said they also see a big opportunity to differentiate by offering a multiplatform approach, and letting developers build games that work across Google+, Google’s Chrome Web Store and mobile. Of course, it has an advantage because of the millions of Android users, whereas Facebook’s mobile efforts are still nascent.

Already, there are some examples of cross-platform play.

Today, you can play Rovio’s Angry Birds and Bubble Witch Saga across both Google+ and the Chrome App Store, and can pick up where you left off between the two.

“These are not Google+ games, but games that are on Google,” Soni stressed. “A lot more is coming on mobile.”

Google has also focused on getting a number of games as exclusives that launch a few weeks on Google+ before they show up on Facebook. To date, it has scored at least three titles — including a major title, Kabam’s Godfather — and there are more coming.

Asked why the game developers are willing to go exclusively on Google+, Soni said there’s some marketing that Google is willing to put toward it, but otherwise, “they are betting on us.”

He says it’s mostly the potential of the platform, and the fact that he’s receptive to feedback, that helps him understand exactly what developers need. Developers also acknowledge that supporting more platforms is helpful in reaching more players and diversifying their risk.

“If they say it’s because the platform is the best ever — no, it’s not true. But the plans we have and the sensitivity that we have for our users and developers, we will be very good sometime soon. … That’s why you are seeing exclusives.”

Soni wasn’t wiling to spill specific plans about what was launching next, but said a lot more is coming.

“We are a start-up platform. We are humble and know our flaws. As we grow, you’ll see new things. My work has barely started,” he said.

Facebook's Ad Business Is a $3 Billion Mystery

Peter Kafka — Thu, 02 Feb 2012 15:49:18 +0000

So the numbers are out, and we know that Facebook’s ad business really is huge. And it really is growing like a weed. Just like we thought.

But how exactly does Facebook’s ad business work? We still don’t know a lot about that part.

The S-1 mentions “advertising” 123 times, and “advertisers” another 117 times. But when it comes to describing how the company actually sells advertising, it is vague.

We know that some of Facebook’s ads are sold via an automated self-serve system, and some are sold via sales teams working in 30 offices around the world. And we know that Facebook uses an auction system to price some of its inventory, and that it lets advertisers target users to some degree, based on their demographics and interests.

But Facebook doesn’t break any of that out in its filing. It simply has one big bucket labeled “advertising.” There’s no discussion of click-through rates, or the size of the average ad buy, or what percentage of ad buys come from repeat customers, or how “lumpy” its sales are.

The company does mention that last year revenue increased, in part because it served up 42 percent more ads, and in part because it was able to charge an average of 18 percent more for each ad it served. But it doesn’t get any more specific than that.

Not that we should expect much more in an S-1. When Google went public eight years ago, its description of its ad business was also pretty vague (here we note that Facebook is stocked with Google expats, starting at the top, with COO Sheryl Sandberg). But by the time of the Google IPO, lots of ad folks had a decent grip on AdWords, its one key offering.

Facebook doesn’t have an AdWords, but a mix of stuff that it is playing with. It admits that this is a work in progress: “Advertising on the social web is a significant market opportunity that is still emerging and evolving. We believe that most advertisers are still learning and experimenting with the best ways to leverage Facebook to create more social and valuable ads.”

Given that Facebook generated a crazy $3.15 billion in ad revenue last year, up from $764 million two years ago, that seems to be a pretty awesome experiment. But Facebook itself seems to think things will need to change.

That’s why, for instance, it is pushing the industry to measure its ads using “gross ratings points” — the same metric buyers use for TV — instead of “traditional” Web metrics like impressions and click-through rates.

And that’s why a good chunk of the S-1 talks about the overall market for advertising — not just Web advertising, but all advertising. The message: There is a lot of money being spent on ads, and as we get even bigger, and smarter, we’ll figure out how to capture more of it.

And at some point they may share some of that knowledge with the rest of us.

Viral Video: Farewell to the No-IPO Mark Zuckerberg

Kara Swisher — Thu, 02 Feb 2012 08:37:58 +0000

For most of the eight years since he has been running Facebook, co-founder and CEO Mark Zuckerberg has essentially dragged his feet on the way to the inevitable initial public offering of the social networking giant.

Here’s proof of that in a pair of interviews Lesley Stahl of CBS’s “60 Minutes” did with him in 2008 and 2010. (I am in the clip, too, and my guessing on the timing of the current IPO pretty is spot-on — a prediction I had forgotten I made).

But the times they are a-changin’ — Facebook filed for its mega-IPO yesterday:

Zuckerberg Is the Billion-Share Man: Who Owns What, Who Makes What in the Facebook IPO

Arik Hesseldahl — Wed, 01 Feb 2012 23:22:07 +0000

In what is probably the most anticipated document ever received by the U.S. Securities and Exchange Commission, Facebook has filed to take its company public in a $5 billion initial public offering later this year.

Having endured lots of speculation around who owns exactly how much, there are now some hard numbers from the S-1 filing that hit the SEC Web site today.

Here are some details of the cap table, which is made up of both Class A and Class B shares, which carry different voting powers. Class B are the common shares.

Not surprisingly, co-founder and CEO Mark Zuckerberg owns the most equity of any single person. His 1.1 billion Class B shares give him almost a 57 percent stake — about half of which he owns and half of which are owned by others but over which he exercises proxy voting authority.

The 27-year-old entrepreneur also holds 42.2 million Class A shares, which represents a 36.1 percent stake of that group.

Facebook’s filing said he will sell some shares in the IPO, although it doesn’t specify how many. However, it noted that most of the proceeds from the sale will go toward paying taxes on his purchase of 120 million options of Class B common stock he also has.

Peter Thiel, the PayPal founder and CEO who sold that company to eBay, owns a 2.5 percent stake, which has decreased over time from the more than 10 percent he owned as Facebook’s first angel investor. Not bad for a $500,000 investment made in 2004.

Jim Breyer of Accel Partners controls more than 201 million Class B shares, amounting to a little more than 11 percent of Facebook’s equity, having led Accel’s participation in Facebook’s $25 million Series A way back in 2006. Breyer is also a personal investor; 11.7 million shares are his, and about 190 million shares are Accel’s.

Digital Sky Technologies, the Russian investment firm, has 5.4 percent of the Class B equity, or 94.6 million shares, owing to its $200 million investment in 2009, plus an additional $500 million in 2011. DST has also been buying Facebook shares from existing shareholders, allowing some to cash out their equity. It also has 36.7 million Class A shares, or 31.4 percent.

Goldman Sachs has a sizable 66-million share slice of Class A shares, or 56.3 percent. Last year, it was involved in the $1.5 billion round that included DST.

There’s also a batch of individuals with single-digit stakes and smaller ones of note.

Dustin Moskovitz: The Facebook co-founder owns 7.6 percent of the company or 133.8 million Class B shares.

Zuckerberg’s father, Edward Zuckerberg, a dentist, was rewarded with two million Class B shares in consideration for his providing early start-up capital to his son in 2004 and 2005. He was given an option to purchase the shares, but the option expired a year after it was given to him, without his exercising it. The board of directors — minus Mark Zuckerberg — issued the 2 million shares to Glate LLC, a company controlled by the elder Zuckerberg.

There are also a few names of note who don’t appear in the filing:

Microsoft had bought a stake amounting to 1.6 percent, stemming from its $240 million investment in 2007, which included a strategic alliance for advertising. Its stake, now likely less, is not mentioned in the filing.

Eduardo Saverin, the Brazilian co-founder, also has a stake worth a few points, but he is not mentioned in its cap tables.

And other VC investors, Greylock Partners and Meritech Capital Partners, are barely mentioned as well. T. Rowe Price owns 6 million Class A shares, or 5.2 percent, as well as 12.1 million Class B shares.

The filing shows that the top five highest compensated employees are:

Mark Zuckerberg’s base salary is $500,000 a year. Effective January 1, 2013, his salary will be reduced to $1 per year. He has options to buy 120 million additional shares of the class B common stock at a strike price of six cents a share, which expires in November of 2015.

COO Sheryl Sandberg made $382,000 in salary and bonuses in 2011 and received $30.5 million in stock awards. She has options to buy 4.7 million shares, of which 3.5 million have a strike price of $10.39, and 1.2 million a strike price of $15. Sandberg already holds 1.9 million shares of Class B common shares and holds 39.3 million restricted stock units, too.

David Ebersman, the quiet CFO whom AllThingsD profiled yesterday, made $382,000 in salary and bonuses and has 2.2 million Class B shares and 7.5 million RSUs.

Mike Schroepfer, vice president of engineering, made $334,000 in salary and bonuses last year. He holds 2.1 million in Class B shares and 6.1 million RSUs.

VP and general counsel Theodore W. Ullyot also makes $275,000 per year and is eligible for a $400,000 annual retention bonus during the first five years of his employment, through 2013. He has about 1.9 million shares and exercisable options and holds 3.8 million RSUs.

Then, there are Facebook’s outside directors: Venture capitalist Marc Andreessen; Erskine Bowles, the former White House Chief of Staff under Bill Clinton; Breyer; Washington Post CEO Don Graham; Netflix CEO Reed Hastings; and Thiel. Each were paid $16,700 in fees for sitting on the board. Bowles got 601,400 shares, while Hastings got 593,400 shares.

Andreessen also has 5.3 millon RSUs that vest over four years. Graham has one million RSUs. Bowles and Hastings also each have 20,000 RSUs.

Zuckerberg Tells Investors, "We Don't Build Services to Make Money"

Liz Gannes — Wed, 01 Feb 2012 22:51:10 +0000

Please see the disclosure about Facebook in my ethics statement.

One of the loudest critiques of Facebook is that it is a profit-motivated machine built by evil geeky people who have little regard for privacy and the world around them.

Facebook co-founder and CEO Mark Zuckerberg tried to dispel those characterizations in a long letter embedded in Facebook’s filing to go public today.

Zuckerberg, who argued that Facebook does not build things to make money, was in a bit of a pickle, because he was also trying to pitch Wall Street on Facebook being a good investment. Plus, many people don’t see the Facebook CEO as particularly sincere.

But Zuckerberg took the opportunity to talk — before Facebook has to bite its collective tongue during its mandated quiet period.

He argued that by not focusing on profits, Facebook is more useful and ultimately valuable. “We don’t build services to make money; we make money to build better services,” he said.

Zuckerberg also discussed Facebook’s global political goals, which is something he and the company have traditionally been reticent about. In the past, Facebook wasn’t sure it wanted to associate itself with the toppling of governments, and was much quieter about its usage as a force of democracy than similar services like Twitter.

In today’s filing, Zuckerberg wrote that he expects governments to be more accountable and people to be more empowered because of Facebook. The “power to share” brings out voices that can’t be ignored, he said.

He also attempted to explain Facebook’s corporate culture, which he called “The Hacker Way.”

As Zuckerberg described it, “Hackers believe that something can always be better, and that nothing is ever complete.”

Here’s the letter:

Stop All That Poking: Facebook Filing Temporarily Crashes SEC Web Site

Kara Swisher — Wed, 01 Feb 2012 22:28:20 +0000

Apparently, Facebook has a lot of friends.

Clickety-clicking ones, whose massive interest in the just-filed IPO of the Silicon Valley social networking giant seems to have temporarily crashed the Securities and Exchange Commission’s EDGAR Web site, where anyone can access regulatory documents on companies.

We’re calling the SEC for comment right now, but the site is still hanging, and sources said the reason is the Facebook initial public offering filing.

Update: It’s back up! Though slow. Still, go government!

Another Update: The SEC got back to us and in response to the question of whether this was related to a Facebook surge, spokesman John Nester said, “Greatly increased traffic that began shortly before 5 pm slowed the public website. We are bringing on additional capacity to handle the load.”

Stuck Like Glue: Zynga Accounts for 12 Percent of Facebook Revenue in 2011

Tricia Duryee — Wed, 01 Feb 2012 22:05:28 +0000

Zynga is mentioned 24 times in Facebook’s filing, but the most notable mention is related to the game company’s huge contribution to the social network’s top line.

Facebook said today in its filing with the Securities & Exchange Commission that Zynga accounted for approximately 12 percent of the company’s revenue last year when Facebook’s revenues totaled $3.7 billion.

The revenue came from both its 30 percent payments processing fee related to the sale of virtual goods from games, such as FarmVille and Words With Friends, but also from advertising purchased by Zynga.

Additionally, Facebook said Zynga’s apps generate a large number of pages on which it displays ads from other advertisers.

The dependence on Zynga is so significant that Facebook warns that if it fails to maintain its relationship with the game maker, or if Zynga’s popularity declines, its financial results may be adversely affected.

Even more notable perhaps is that it’s not just Zynga. Facebook said social games are currently responsible for “substantially all of our revenue” when it comes from payments.

In December, Zynga went public, raising $1 billion, and is obviously one of the companies most reliant on the social network. But now with Facebook’s financials also public, we can see that the two companies are actually interdependent.

And, in fact, over the past three years, Zynga’s importance has only increased. In both 2010 and 2009, Zynga accounted for less than 10 percent of Facebook’s revenues.

The big turning point occurred in May 2010 when Zynga agreed to use Facebook Credits as its primary payment method inside games. As part of that, Facebook would collect 30 percent. That contract will expire in May 2015.

Some of the details of that contract were disclosed as part of Zynga’s public offering, but we wouldn’t be surprised if Facebook is also required to publish it at some point. In the version Zynga released, a lot of the contract was redacted.

In after-hours trading, Zynga was trading about 4 percent higher to $11.02 a share, nearing it’s all-time high of $11.50.

Facebook Has 845 Million Users, Each Worth $4.39 in Revenue

Liz Gannes — Wed, 01 Feb 2012 21:59:08 +0000

Please see the disclosure about Facebook in my ethics statement.

Facebook had 845 million monthly active users at the end of 2011, it said today when it filed to go public.

That’s an increase of 39 percent from 608 million active users at the end of the previous year.

With $3.71 billion in revenue spread across 2011’s users, that gives a rough total of $4.39 in revenue per user per year.

Some 483 million Facebook users visited the service daily in December 2011, which was up 48 percent year over year.

That’s a bunch of numbers to throw out at once, but you’ll note that Facebook daily user growth is outpacing monthly user growth — meaning the service is getting stickier.

In its early days, Facebook had given public user count milestones for at least every 50 million new users. In recent years those updates had stopped, with Facebook saying it wanted to focus more on engagement.

Today’s 845 million count is on track, but not necessarily ahead of projections based on Facebook’s previous public user count milestones. The last one was 800 million in September.

The chart pictured above comes from iCrossing, which recently estimated that Facebook would have one billion users as of August 2012 if current growth patterns continue.

On Its Eighth Birthday, Facebook Files to Raise $5 Billion in Massive IPO (Get Your S-1 Here!)

Kara Swisher — Wed, 01 Feb 2012 21:51:54 +0000

Here are the major stats on Facebook’s IPO, which it just filed: 845 million monthly users and 483 million daily users; annual revenue of $3.7 billion; $1.8 billion in annual operating income and $1 billion net income.

And the raise in the initial public offering for now? It’s $5 billion. That could go up, of course; as yet, there is no valuation listed in the S-1 filing with the Securities and Exchange Commission for the social networking giant.

Let’s just say, it will be a lot.

And here are some uh-oh stats:

A full 12 percent of Facebook’s revenue in 2011 was linked to its relationship with online gaming giant Zynga.

And overall growth is slowing too.

Said Facebook’s filing:

“We believe that our rates of user and revenue growth will decline over time. For example, our annual revenue grew 154% from 2009 to 2010 and 88% from 2010 to 2011. Historically, our user growth has been a primary driver of growth in our revenue. Our user growth and revenue growth rates will inevitably slow as we achieve higher market penetration rates, as our revenue increases to higher levels, and as we experience increased competition.”

That is still en fuego, but will be noted by many.

In case you were visiting the outer rings of Jupiter and did not hear, you might want to know that Facebook filed for an initial public offering today. It is perhaps the most eagerly anticipated of financial events in Silicon Valley in many years.

The massive social networking site — which was launched in an undergraduate dorm room at Harvard University on the first Wednesday in February 2004, exactly eight years ago — is now a global phenomenon.

Its rocket ride to the top of the Internet and in Silicon Valley has been largely due to the aggressive innovation of one very unusual founder, CEO and co-founder Mark Zuckerberg.

Assembling an experienced team and pushing through a series of sometimes controversial products to link friends together online, the young entrepreneur has built a service that now is challenging even search giant Google.

Zuckerberg has been slow to take the company public, although the move was inevitable.

And now, of course, it is here.

More to come, as the ATD team parses the IPO filing, which is below (so join in!):

FacebookInc-20120201-S1-0

Go the F**k Back to Sleep, Silicon Valley: Facebook IPO Likely to File Later Today at Earliest

Kara Swisher — Wed, 01 Feb 2012 14:36:08 +0000

Like political junkies waiting up for election returns (losers!), Silicon Valley folks, including tech journalists (losers!), are up this morning to await and then pounce on the long-expected IPO filing of Facebook.

But, several sources said, the social networking giant — as I have previously reported — will likely not file its copious documents until this afternoon, after the markets close, at the earliest.

In other words, my day is shot. Thanks, Dave Ebersman!

Sources said the filing could even possibly slip a day, as the company’s suits get busy with dotting all the I’s and crossing the T’s.

That’s unlikely, though — Facebook was actually founded the first Wednesday in February of 2004, like today eight years later.

Sentiment from the not-very-sentimental co-founder and CEO Mark Zuckerberg? Awwwwwwww …

And, if those dudes rush, we might even see all the deets of the Silicon Valley darling’s finances and other info — including who’s got what shares and who doesn’t — earlier today. But don’t count on it.

That’s right — Facebook is sucking up even more of your precious time, and it is not even fun like beating your mother at Words With Friends or creepily poking old flames.

Facebook, Web 2.0′s most successful start-up, is expected to raise many billions of dollars on a valuation of tens of millions times that.

In other words, blah, blah, blah until we get the real numbers …

To send you off to IPO dreamland until then, here’s the genius viral video reading of the book “Go the F**k to Sleep,” read by Samuel L. Jackson:

Dude, Where's My Facebook IPO Filing? (Ashton's on Hold!)

Kara Swisher — Wed, 01 Feb 2012 13:50:05 +0000

Okay, okay, we get it: Morgan Stanley got the coveted left-hand lead position on Facebook’s blockbuster IPO filing. Goldman Sachs is there, too, but in the third-place, always-a-bridesmaid spo,t and is crying big salty tears about the injustice of it all.

It’s hard to feel badly for overpaid investment bankers, and focusing on them is kind of like endlessly discussing the lawyers who processed your mortgage, when the focus should be on the house you’re buying.

Does anyone except a few Richie Rich ZIP Codes in Manhattan care about this one deet of the initial public offering of the social networking giant?

Nope, but there is so little real news ahead of the IPO filing expected today that this is what we are chomping on this morning, as everyone awaits the big doc drop at the Securities and Exchange Commission.

Sources said it is likely to come this afternoon rather than this morning, though. And, perish the thought, all that dotting of I’s and crossing of T’s could delay it to tomorrow, even (unlikely, but mebbe!).

Sigh.

Tidbit: Facebook was actually founded the first Wednesday in February of 2004 in an undergraduate dorm room at Harvard University, like today but eight years later.

Thus, here’s a boring Facebook history timeline chart to look at:

Okay, that was really dull.

What up? The board met, the spinmeisters are at the ready and, most of all, Silicon Valley is stoked to make some more arrogant badillionaires.

Now, hopefully, we’ll get the real news about Facebook.

Namely, who’s getting the big dough in this much-anticipated Web 2.0 gambit? Co-founder and CEO and Hoodie Commander Mark Zuckerberg fer sure, but who else?

Plus all the juicy financials from Facebook, along with stats in usage, growth and just how much the company sticks it to its gaming serf — oops, partner — Zynga and others for the privilege of being on its all-powerful platform.

Me? I pay nada, like other Facebook users, for being able to show off pictures of my vacations and decline friendships from PR people I like, but still … well, you know.

Here is another Facebook financial chart that will not knock your socks off unless you are an accountant:

I am now so comatose waiting for the show to begin that I briefly began a liveblog of my activities this morning.

It went like this:

You get the idea — so, Facebook IPO, take me away!

The Quiet Man: Meet the Less-Known Face of the Facebook IPO, CFO David Ebersman

Kara Swisher — Wed, 01 Feb 2012 01:10:52 +0000

Ever heard of David Ebersman?

You should, and this week you will, given the self-effacing exec has been one of the prime movers behind what is expected to be the blockbuster offering of Web 2.0: Facebook’s impending IPO.

And while the social networking site’s movietastic co-founder and CEO Mark Zuckerberg and its smooth-operator COO Sheryl Sandberg have gotten a lion’s share of the attention related to the initial public offering, the former Genentech exec has been the key man in organizing the IPO itself.

The kickoff to that will be its filing, which could come as early as tomorrow morning. Whatever the valuation and raise numbers are — that’s still not clear — it will be a badillion-zillion-tons.

That has meant a lot of noise and also shuttling among investors, bankers, board and all the many other dueling constituencies to organize what will be one of the most scrutinized IPOs in tech.

And, so far, the reviews of Ebersman, 42, have been good, with most praising his lack of ego, quiet confidence, professional demeanor and, most importantly, no drama as important attributes of what has been a smooth process, considering.

“This is a three-ring circus no matter what,” said one source. “But Ebersman has made it much less so by making sure it was as steady as it could be.”

That calm tone has also made him a favorite of Zuckerberg and Sandberg, as well as key Facebook board members such as Marc Andreessen, since he arrived at the company in 2009. At Facebook, he has been in charge of its finance, facilities and information technology teams.

But Ebersman has been a lot more than that, said multiple sources, taking the key role in the IPO, but also spearheading critical long-term planning initiatives and instituting strict resource allocation systems.

That sounds dull, but regimenting Facebook has been one of the hallmarks of its growth and stability compared to many other competitors.

“He could easily be a CFO for a Fortune 10 company … but he is much more than an accountant or a deal maker, which are two flavors CFO usually come in,” said one person who is an admirer of his work. “But [Ebersman] is much more than that — really leading the charge on significant fronts related to the core of Facebook’s operations.”

Before coming to Facebook, the Brown University graduate was CFO of biotech giant Genentech, where he also held a number of other more operational positions, including being in charge of product development there. Ebersman was also a research analyst on Wall Street.

He came to Facebook’s attention via Genentech’s Art Levinson, who recommended Ebersman to the company, despite his lack of Internet experience. He replaced Gideon Yu, who left Facebook in a controversial departure.

While initially concerned that he had little digital experience, Zuckerberg, Sandberg and others were immediately convinced that Ebersman was just what they were looking for — low-key, smart and able to grok the complexity and challenges of Facebook.

“You can hire someone who knows the space or someone who is like a great athlete and can master anything,” said one person. “David is the latter.”

Ebersman has been given the ball a lot with regards to the IPO, even though all roads of decision-making essentially lead to Zuckerberg, who has been intent on not rushing to market in favor of growing the business.

Low-key was one of Zuckerberg’s main tenets of the IPO as it became more inevitable.

Thus, one of the first things Ebersman did was nix the “pitch” process by banks.

Instead, sources said, he worked with bankers individually to design an IPO that would work best for Facebook, including keeping fees low.

“It was very hands on and careful, with Ebersman crafting close relationships rather than pitting banks against each other,” said one source. “But it was also all about Facebook maintaining complete control.”

Still, Ebersman also did not veer away from a relatively traditional process — no wacky Google auction here.

“Facebook is not taking chances with this IPO and wants to make it a blue-chip event,” said another source. “Neither David nor the company thinks this is a time to be that experimental.”

But one thing is clear as the IPO machine now moves into high gear: “This is a team — specifically Mark, Sheryl and David — that is completely aligned going into this and David is the implementer they trust to make it so.”

We’ll see how it goes in what will be a busy time going forward.

One thing for sure — Ebersman, who plays bass guitar in a band in his spare time, will have little of that in orchestrating the biggest arrangement of Facebook’s life.

Facebook Board Meeting Today for Final IPO Okays

Kara Swisher — Tue, 31 Jan 2012 22:41:33 +0000

According to several sources close to the situation, the Facebook board has been meeting early this afternoon at its Silicon Valley HQ to give the go-ahead to a massive initial public offering.

Facebook is expected to file regulatory documents as early as tomorrow morning for what will certainly be one of the most-watched IPOs in tech in recent years.

Sources also noted the filing could happen after markets closed tomorrow, too.

While sources said the filing time could still change even later this week, that seems unlikely, especially given the furor over every detail — including entirely meaningless ones — about the much hyped Facebook offering.

But it’s finally here and will be much scrutinized.

As I previously reported, the offering is expected to be below an overblown valuation number of $100 billion that has been widely reported and the amount being raised is also less than the $10 billion being bandied about.

I would tell you those numbers if I knew, but the offering has been locked down tight by Facebook — much different than blabbier recent IPOs from Internet companies. (Heeelllloooo, Groupon!)

That’s because Facebook management has been determined to conduct an IPO with as little drama as possible and is seeking to minimize a bubble atmosphere around the event.

(I might start liveblogging the IPO countdown right now, just to ramp up the noise and send CNBC into a frenzy.)

The board of Facebook is chaired by co-founder and CEO Mark Zuckerberg, who has been the most insistent about conducting the IPO with more deliberation and care.

One notable difference, for certain, has been Zuckerberg’s patience in growing the business before taking Facebook public. Still, it is important to remember that its history has actually been very short in time — the start-up was launched as thefacebook.com from his dorm room at Harvard University in early 2004.

If you are counting, that is only eight years ago.

Zynga Closes Above Its IPO Price

Tricia Duryee — Mon, 30 Jan 2012 22:03:47 +0000

Maybe it’s the hype around Facebook’s impending IPO, or the opportunity for real-money gaming, but, for whatever reason, Zynga is trading higher than its $10 offering price for one of the first times since December. Today, the social games publisher was up 3.4 percent, or 34 cents, to close at $10.39 a share. Earlier this month, Zynga lost at least 20 percent of its market value, and was having a hard time staying above $8. Fourth-quarter results are due on Valentine’s Day.

Eight Deals Aim to Hit the Market

Lynn Cowan — Mon, 30 Jan 2012 14:00:54 +0000

The business of going public is starting to heat up again. Eight stock offerings aim to start trading in the second half of the week, more than twice the amount in all of January so far.

The list is dominated by energy-related and tech deals, with the leader of the pack, security software company AVG Technologies NV, scheduled to launch its IPO on Thursday.

Read the rest of this post on the original site »

Kayak's Web Site Takes Its Influence From Mobile for Its Latest Design

Tricia Duryee — Mon, 30 Jan 2012 13:02:20 +0000

Travel comparison site Kayak.com has redesigned its Web site so it looks like its mobile app — not the other way around.

“We run the iPhone and iPad teams separately from the Web team, and the Web team had fallen behind,” said Paul English, co-founder and CTO.

The goal with the site’s design has always been to provide a simple layout, so that users can easily sift through thousands of flights, hotels and car rentals to find what they are looking for quickly.

But up until now, the focus wasn’t really on being beautiful, English said. The new look tries to incorporate a clean and attractive design.

After eight years in business, English said this is the most significant redesign of the site (check out the gallery below to see how the site has changed over the years). But only the most die-hard users are likely to notice many differences. Rather, the larger significance is that mobile is influencing the Web, and not the other way around.

Increasingly, this may be the case in the travel industry as so much of the traffic now comes from phones and tablets. Kayak said more than five million applications were downloaded in the nine months ended in September, a 97 percent increase over the same period a year earlier.

In early testing, English said conversion rates are higher and completion times are shorter as a result of incorporating mobile designs — which, by nature, are always built with speed and ease-of-use in mind. “They [customers] are more confident to compete the purchase because we haven’t worn them out.”

View the slideshow

Here’s some of the more notable changes:

The unibrow is gone: Internally, the company refers to “the unibrow” as the black bar that stretched across the the top of the page that said “Search One and Done.” Now at the top of the screen are several tabs, such as Flights, Hotels, Cars, etc.

Similar to iOS: The iPhone and iPad designers released a new iPad app about a month ago. In the new Web site design, they leaned on the design to bring a consistent typeface and coloring to the Web site.

Fewer ads on the site: When users are looking at photos of a hotel or viewing a map, they won’t see any ads. “Obviously, ads are an important part of the way we make money, but advertisers have gotten clever, and sometimes the ad is jarring and has animation,” English said. Kayak is issuing all-new guidelines that requires advertisements to blend with the site. “If you do a good job, it should be content. If we are showing you ads that are extremely related to what you are doing, it’s useful.”

Most of the changes will go live today, with some of the others — like the new ad guidelines — taking more time to implement.

English declined to provide an update on the company’s IPO. While it continues to file financial updates with the Securities and Exchange Commission, Kayak told AllThingsD in September that it was putting its plans on hold.