Facebook IPO: What is in the S-1 to convice you its a good buy?

Facebook’s IPO is going to be as big if not bigger than Google was a few years ago. The S-1 filling document is a very lengthy dry read that most people will skip. We are not most people. The S1 was very insightful. For one thing we don’t have to wonder if Zuck would still be in charge. He will have the most votes based on his type of stock. The shares will be split into “A” and “B” shares, where the latter get 10 votes per share, and the former get one. Zuckerberg presently owns around 28.2% of the share capital.

Facebook had revenues of $3.7bn and had an operating income of $1.7bn.
They had 845 million active users and the numbers are still growing.

Saying Facebook depends on advertising is a common sense but what surprised us is that it only accounts for 85% of the revenue. The rest comes from in-app purchases.

Zynga is almost as important as Mark is for the company. In 2011, they were 12% of Facebook’s revenue. Facebook wrote in that “If the use of Zynga games on our Platform declines, if Zynga launches games on or migrates games to competing platforms, or if we fail to maintain good relations with Zynga, we may lose Zynga as a significant Platform developer and our financial results may be adversely affected.”

The mobile version of the site had 425 million monthly active users in December 2011. There are no ads on the mobile site but that may soon change. The S1 states, “our revenue may be negatively affected unless and until we include ads or sponsored stories on our mobile apps and mobile website. We believe that people around the world will continue to increase their use of Facebook from mobile devices, and that some of this mobile usage has been and will continue to be a substitute for use of Facebook through personal computers. In 2011, we began serving our products from data centers owned by Facebook using servers specifically designed for us.” I wonder will the servers help place ads on mobile devices?

There are 138m shares that have been issued to the employees of Facebook for $0.83. At an expected price of about $45, that’s almost $6.2bn profit for the employees. That is not a bad turn around for a 401K plan.

The word “AppStore” is fair to use by anyone so, says Judge

Apple’s request that Amazon stop using the word “Appstore”  has been rejected. I am very happy with that. Appstore is so generic that a win would have opened up the door to many more lawsuits.   Apple filed against Amazon in March. They said at that time that Amazon’s “Appstore” infringed on Apple’s “App Store” trademark. Amazon said that those claims were “baseless,” and Microsoft said something to that effect as well.  The Judge Phyllis Hamilton said that “The evidence does show that Apple has spent a great deal of money on advertising and publicity, and has sold/provided/furnished a large number of apps from its App Store,”

She goes on to say “However, there is also evidence that the term ‘app store’ is used by other companies as a descriptive term for a place to obtain software applications for mobile devices.” Thus  Apple’s use of the phrase “App Store” was “more descriptive than distinctive.” Microsoft and Apple are also fighting over the term — and Microsoft has said that the term “App Store” is “generic for retail store services featuring apps.” Apple’s case against Amazon is currently being heard by an appeals board.

This is an Alert. Had this been a real emergency, you would have gotten a text. A new mobile alert system comes to out

New York,  FCC and wireless carriers have come out with a new emergency alert system. The system will be called  called PLAN. (Personalized Localized Alerting Network) The PLAN is to notify mobile users in a specific geographic location. So it will use the GPS of your mobile device to warn you of hazardous/life threatening situations around you. Here is to hoping the system works when it is really needed. Unlike the Emergency Alert System that did not go off during 9/11 in New York. New York City Mayor Michael Bloomberg had the following to say about the system:

One of the many lessons that were reinforced on 9/11 is the importance of getting clear and accurate information to the public–that’s why we’ve made improving our emergency public communications a top priority. As part of this effort, we’re harnessing tech in innovative new ways, which is something I found to be effective in both business and government for improving service delivery.

If you have a compatible  mobile device you will receive emergency alerts based on your GPS location. There is no word yet on when compatible phones will hit the market or now to make the phone you have now compatible. PLAN will have three types of alerts:

1. Alerts issues by the President
2. Alerts warning of imminent threats (Think Weather)
3. Amber Alerts.

You can block Imminent threats and Amber Alerts but an alert by the President can not be blocked. The system will be in New York and Washington, D.C. soon. Real soon like by the end of the year soon. The rest of the US will get it by April of 2012.