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Facebook's numbers

dcurt.is

113 pointsmaccman75 comments

User penetration: 0% China.

Tencent, Chinese Facebook, is already a public company. Take a look at their numbers here: http://www.tencent.com/en-us/ir/reports.shtml

Additionally User penetration is referring to percentage of Internet Users not Total Country Populations - I got confused and had to refer to original documents.

Is that stat serious or is it some political statement? Facebook really has zero users in China?

It is not "zero": most of my colleagues in a Chinese web company have Facebook accounts and some do use them regularly. But they have to use proxies and are a minority. I think it is not unlikely that the rounded figure is 0%.

China does resolve to counterfeit and steal any idea or technology we have... Even Facebook.

they have almost a billion people without a single person in China?....wow

The most interesting numbers to me:

$30,957,952 Sheryl Sandberg, COO 0.089% Sheryl Sandberg

The second most important person at Facebook takes most of their compensation in cash - with her stock in the company being worth roughly 3 yrs salary.

She's older than Zuck, no reason to think she'll ever be CEO. I have to believe she has career aspirations beyond Facebook if she's willing to work there for less than defectors Moskovitz and Parker are making on the IPO, among others.

I think that Sheryl Sandberg has options worth close to $1B, but either they are not vested yet, or she didn't exercise them. Still not as much as Moskovitz or Parker, but probably more than she would get at any other company (except one where she is the founder).

I found it interesting that Zuck makes so little, myself. Though he clearly isn't starving, I'm always bemused at people who have the option to get their 'fuck you' money and don't take it. I was dazzled by it at Groupon's Google acquisition turndown, and am dazzled by it with Zuck as well (though perhaps he's already exercised some fortune I don't know about?)

I suppose that perhaps there's an appearance of questionability when one gets cash out, but even if they don't "cash out" in any other sense, I'd think that at least that first bit of big money would be hard to turn away from.

"I was dazzled by it at Groupon's Google acquisition turndown, and am dazzled by it with Zuck as well"

Clearly the move by Groupon was a mistake. Ok, you want to build a big company and have a vision, etc, etc... Great. Who cares? That kind of money doesn't come along very often — take it and move on to your NEXT great idea. You'll have another one. Millions in the bank and vacations on yachts and private islands do wonders for the imagination.

Of course, I thought Zuck was crazy for turning down $1 billion from Yahoo 5 years ago. He turned out to be right on that one.

Just out of curiosity: It's considered good manners to disclose that you have a vested interest in something you're writing. Are you also socially obligated to disclose that you plan on investing in something in the future?

If I owned Facebook stock, I would disclose that. Since I can't own it yet, but probably will after the IPO, I figured it would be worth disclosing.

This way though it could come off as a pitch for readers to go and buy Facebook stock/stock advice.

How is it a pitch to buy? If anything, it's a pitch NOT to buy. $1 billion/quarter revenue (and $210M profits) doesn't justify the $100 billion valuation. Not even close.

Consider Google, valued at $200B has a revenue of $10.6 billion/quarter, and $2890M in profits.

Also, GOOG has been consistently growing:

http://www.google.com/finance?q=NASDAQ:GOOG&fstype=ii

While Facebook is failing to.

So what is the realistic value of FB? Based on these numbers, $15 billion at best.

I don't think anyone would seriously buy based on the current figures. If you buy Facebook today, you're hoping for exponential growth over the next few years, at which point you can either sell at a profit or take dividends (if Facebook ever pay them - US technology companies don't tend to pay out much).

If you want a return now, you could just buy shares in a utility company for a fraction of the price, since they already make multi-billion pound/dollar profits and distribute large chunks to shareholders.

Sure, the article in itself may speak to not buy looking at the figures, I was meaning the specific sentence.

People forget that Facebook still can be Google killer. They can reveal a better search (since their search function is used more than the Google's one).

Even easier task for them would be creating an ad content network similiar to AdSense since they can provide way more information about a visitor than Google's tracking.

This is precisely why Larry Page tries to shove Google plus into everyones throat.

Their search function is used more than Google's? How do you possibly arrive at that conclusion? The only instance where I would possibly use Facebook's search function is if I'm typing in the name of one of my friends. On the other hand, the main reason I use Google, and do so many times every day, is for the search functionality.

Facebook Search is surely the most widely used function of the website. I myself have facebook set to be my homepage, therefore it's handier to just type anything I want in there - rather than having to visit google first.

What? How? I'm genuinely curious now. When you search on Facebook you only get results that are Facebook pages. You can't get Wikipedia entries, Stack Overflow questions, other companies' websites, programming language documentation, or anything that's the usual results of what I search for on Google.

What do you generally search for, and how can Facebook serve you relevant hits?

> When you search on Facebook you only get results that are Facebook pages.

Actually, you can get web search results on Facebook through Bing. It is one of the side tabs on the search page. But I can't imagine many people doing that.

Yeah I was aware of this functionality, it's definitely far too clunky for most users though to go through clicking on that at the side of the page when most browsers now allow direct search through the address bar with the search provider of your choice.

Well, thanks for the downvotes - this probably did not add to the discussion?

All of the 3 points are true. Facebook search form (that used to find friends) is used more often than Google's search. If people at Facebook can think of a good way to force people to search the Internet through the Facebook, they can get quite substantiable share of the search market. Many people have set the Facebook as their homepage.

Facebook enables better targetting. You can't for example target specific age groups with AdWords

Google plus was a response to Facebook, contrary to what Google's PR team tries to estabilish.

Facebook already has a "search engine" in their search box. You say no one uses it because it's not good (not sure that's true), I say no one uses it because Facebook is not the place where people search for things on the internet.

Remember that Microsoft made it very convenient to use MSN Search for many years by setting it to the default home page and having it in their search box of IE. It didn't work, people typed google.com and did their searches there.

And you're wrong about advertising. Facebook's is valuable but it will never be as valuable as that of people who are searching for something with the intent of buying that thing.

Since you brought it up, the reason I downvoted you was for lack of citation, and adding a couple of questionable insights posited as facts.

After reading your assertion, I Googled for the volume of Google search queries, and ran into this article -- http://news.ycombinator.com/item?id=3928298 (that I just submitted) -- which contradicts your claim, stating that Facebook search volume lags behind the other five big search engines.

On what grounds do you assert that it's true?

It wasn't a factor, but I'd also question whether or not Facebook enables better targeting. I'll concede that they have strong targeting, but I don't know that anybody can say for certain that it's 'better' than Google's, especially as Google can target ads based on what you're looking for at that particular moment.

Facebook might know that I like comic books, or Elmore Leonard novels, or what have you, but Google knows that "I want more information about vacations to Fiji". Which is the more powerful target? The latter, I would guess, especially as I already have suppliers for my other interests.

> They can reveal a better search (since their search function is used more than the Google's one).

[citation required]

serious question: what it means to be "socially obligated" ?

Just that you're expected to do something by others, mostly by convention, like saying thank you.

(presuming this is an English question, not a philosophical one).

"Social norm" is the technical term.

http://en.wikipedia.org/wiki/Norm_(social)

I guess my phrasing could have been better. 'polite' may be a better way to put it.

Yeah, almost felt like he was trying to brag under the guise of "transparency".

Trying to brag that he's thinking about buying something that anyone can buy?

Seeing Microsoft in that list reminded me how they bought a bit more than 1% of Facebook shares for $240 mio a few years ago. I guess that was a pretty good investment after-all...

http://www.msnbc.msn.com/id/21458486/ns/business-us_business...

So now for the elephant in the room:

If, as some claimed regularly since a few years (including Fred Wilson, implicitly[1]), we are in a tech/financial bubble, what is the probability that the Facebook IPO will be the sting popping the bubble? If so, what are the likely results?

[1] "If you are playing a game of musical chairs", http://www.avc.com/a_vc/2012/04/what-if-web-and-mobile-apps-...

Facebook could hardly be included as part of any current tech bubble. The early 2000s tech bubble included companies spending millions in investor cash on stupid ideas that would never pan out (online pet food, hundreds of dating websites) and having a grandiose IPO before earning even a dime of revenue. It wasn't over-valuation, it was shocking that some of these companies had value at all.

I personally feel Facebook is over-valued but they have revenue and profit. I think it's a bad early investment and will settle way down south of the debut, but they will be around a very long time. They aren't Pets.com.

Slightly off-topic:

I had always thought Adam D'Angelo was a co-founder of Facebook, so I was surprised to not see his name listed in the ownership section.

But Wikipedia lists Dustin Moskovitz, Eduardo Saverin, and Chris Hughes as co-founders in addition to Mark.

http://www.quora.com/What-was-Adam-DAngelos-career-timeline-...

Answered by Adam:

"I was in college as an undergrad at California Institute of Technology full time until I graduated in 2006. Facebook launched in spring 2004. In summer 2004 I lived with the Facebook founders in Palo Alto and helped out a little, though I was mainly working on Wirehog, which was a social filesharing network. In summer 2005 I was officially a full time employee at Facebook, and then I took off the next semester from college to keep working at Facebook through the end of 2005. Then I went back to college for the second half of the 2005-2006 academic year, graduated, and went back to Facebook full time after that."

I think Zuck met Adam during high school at Exeter, so they arguably knew one another for a much longer time than the other co-founders.

Maybe that's why you thought that.

I think it's helpful for our international HN cohorts to know that Phillips Exeter[1] is , pretty much, the most elite high school in the US.

[1]http://en.wikipedia.org/wiki/Phillips_Exeter

I think that was helpful for even fellow Americans like myself who had no idea either.

I don't understand the hype around Facebook. They make $1,058M revenue in a quarter and have (if you multiply the monthly active users by 3) 2,703M active quarterly users. So they only make $0.39 per active user per quarter? Maybe I am missing the point but it doesn't seem like the revenue generation side of things is very efficient.

Where's Eduardo Saverin?

According to the S1 filing, this was the criteria for disclosing:

* each stockholder known by us to be the beneficial owner of more than 5% of our outstanding shares of Class A common stock or Class B common stock;

* each of our directors;

* each of our named executive officers;

* all of our directors and executive officers as a group; and

* all selling stockholders.

It's safe to say Eduardo doesn't fit into buckets 2-4, so as long as he doesn't own at least 5% or isn't selling stock as part of the IPO, he wouldn't need to be disclosed.

I didn't realize Zuckerberg received so much less in compensation. He owns a huge portion of the company, sure, but is compensated ~29m or so less than the COO. Is anyone familiar with why this is?

Mark isn't going anywhere. He would be building Facebook if the pay was $0/yr. This is a token amount that covers his living expenses and little else.

Must be nice to have 29m of "just" living expenses.

$1.7M in living expenses, not $29M.

Still a lot, but a house in Palo Alto and personal security alone might justify most of that. Guys like Steve Jobs who take $1 in salary already have lots of liquidity, and Zuckerberg doesn't necessarily have that.

He has facebook pay for his security detail and private aviation... like a boss.

Living expenses and AMT: http://en.wikipedia.org/wiki/Alternative_Minimum_Tax .

Missing Accel Partners in the "Ownership after IPO" (probably it was merged into "James Brayer")

How are there 500 million users but only 125million friendships? Am I missing something?

125,000 Million -> 125,000,000,000

Wow, 278 average friends per user? That's a lot higher than I would have thought..

Well, it takes 2 users to make 1 friendship, so it would be half of that. Plus that's the number of daily users, the total number of users is like double. So the average friends per user must be around 65.

The average is 190.

http://arxiv.org/pdf/1111.4503v1.pdf

Huh?

There's 125 billion friendships and 900 million monthly active.

125 billion / 900 million = 139 friendship pairs / user

A pair = 2 friends so you double it to get 278 friends/users.

This is of course an overestimate as people are friends with people who use fb < once a month. Not sure what total user count is though.

That's 500 million daily active users - they ave nearly a billion monthly actives, and the total number of user accounts wasn't mentioned in the article.

Interesting that most on that list will end up paying California State income tax in one form or another. (I say 'interesting' because the legislature has already spent Zuck's estimated tax bill, but Andreesen, Breyer, others they too will have large bills to pay.

Operation cost and profit?

When you look at a statistic like:

Penetration in Turkey: 85%

If market research is not the first thing that comes to your mind, then you should probably go see a shrink.

So you made an appointment then?

Yup!

heh, love how the revenue out of America is WAY higher than that of Europe even though there are more active users in Europe.

Should really specify that the revenue listed is for one quarter.

Also worth mentioning that James Breyer does not own 7.632% of Facebook. Accel Partners owns most of that stake, and Breyer has his own personal, smaller stake in Facebook.

Thanks.

I've updated the post to specify that revenue was for last quarter.

The S-1 describes James Breyer's shares as a combination of his and Accel's, with the following footnote:

(12) Consists of (i) 11,703,132 shares of Class B common stock held of record by James W. Breyer, Trustee of James W. Breyer 2005 Trust dated March 25, 2005 (Breyer 2005 Trust); (ii) 149,527,730 shares of Class B common stock held of record by Accel IX L.P. (Accel IX); (iii) 15,931,653 shares of Class B common stock held of record by Accel IX Strategic Partners L.P. (Accel SP); (iv) 13,939,214 shares of Class B common stock held of record Accel Investors 2005 L.L.C. (Accel 2005); (v) 9,949,820 shares of Class B common stock held of record by Accel Growth Fund L.P. (Accel Growth); (vi) 194,230 shares of Class B common stock held of record by Accel Growth Fund Strategic Partners L.P. (Accel Growth SP); and (vii) 132,570 shares of Class B common stock held of record by Accel Growth Fund Investors 2009 L.L.C. (Accel Growth 2009).

Agreed, he should clarify 1Q 2012. And it looks like he has it wrong.... The filing says $872M not $972M (page 51 of pdf).

That graph on page 51 is comparing advertising revenue ($872M) to payments+other revenue (the smaller bar, $186M). Total was $1,058M.

Edit: updated the total.

I'm confused then. Where are you getting $972M? If you are doing total revenue (advertising + payments and other), it's $872M + $186M = $1,058M

And also, page 56 of the pdf lists $1,058M as total revenue for 1Q 2012.

I'm surprised that Parker has a bigger share than Thiel.

iono; I'm happy to see Parker up there.

ok, so:

#1 how is it possible that there is 0% users in China.. IF they truly believe NOONE in China has facebook account, then any other of those numbers could be made out of the blue as well.

#2 Why is it soo important to attach Zynga everywhere they disclose info? is it some sort of Zynga-FB agreement or what?

#3 David Fischer is missing comma after "VP"

#4 Peter Thiel, James Breyer, Reed Hastings, Erskine Bowles, Donald Graham -- what are they "Directors" of?

#5 Frequency of words appearing in S-1: second place: mobile. This is a HUGE indicator to anyone thinking about startup... things ARE and will continue to happen over the mobile device more and more. This sound trivia, but think about another indicator: your startup idea versus mobile.

The actual Facebook report says on page 49: "[...] in China, where Facebook access is restricted, we have near 0% penetration."

So they definitely know people are using it there.

It would be limited to the Chinese who have access to a VPN and can speak English, and have a social group of foreigners.

There are also alternative Chinese social networks where their friends are, and without the added chore of finding a VPN service which they can pay without a non-Chinese PayPal account or credit card.

1. <0.5% rounds down

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