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.

F8: Facebook adds music (as expected) but the way they do it was not & what’s this? Movies & games? Yes and yes Hello Open Graph

We knew that Facebook was not going to go down without a fight. F8 that is still going by the time you read this has shown that they still have a lot in their social bag.  New apps allow users to add activity to Timelines without getting prompts to share with friends. “You’re connecting the app and your Timeline together,” says Zuckerberg. They have teamed up with Spotify for music and Netflix/Hulu for more was to make media content more social.  You can not just click a show or movie that your friend is playing to start to watch it with them. Mark speaks to just having apps connected to Facebook that have reports at the end of the month. People can just hover order the app to download it. One wonders will that take you to the website, Android marker or The AppStore?

There are now visuals such as infographics and year-in-review publications and how they tie to Timeline. A designer who would regularly conduct annual visual reports on companies and how that sparked the idea of what a report like that on one person’s life would look like. Was hired to work for Facebook. You will be able to have your own infographic. This is kind of cool I must say. Zuckerberg says the Timeline beta period will start now. Developers can start using it today, and Timelines will roll out widely over the next few weeks. It should be interesting to see how well Graph Rank works. Will it help me discover new apps or will it just be what gets the most advertisement?  I will say it has been a while since I have been actually looking forward to using Facebook for more than just a nothing way to expand my audience.

MUSIC:

A “real-time serendipity” feature allows you to share content such as Spotify songs with friends easily. If someone is listening to a song on Spotify, you can hover over it and listen along with them or chat with your friend about it. “Developers are using OpenGraph to not only rethink music, but to rethink the whole music industry,” Zuckerberg said. Facebook partnered with other music companies for content as well, although it highlighted its relationship with Spotify. “You’ll now start seeing new music posts and play buttons all over your newsfeeds,” Spotify said in a blog post on Thursday. “Hit a play button and the music starts. Right there.”

Movies & Shows & TV:

DirecTV, Blockbuster, Flixster and Dailymotion. We’re super excited about all of these great applications, and of the social aspect of Netflix,” says Hastings. He adds “outdated privacy law” preventing company from adding Netflix integration to Facebook right now. Note that Netflix Viewing data lets you share only the viewing habits you want to share, this kind of social TV could create an entirely new way to find shows and movies to watch.

Games:

Games are now even more social. You can see what is happening within the games your friends are playing.

Apps:

Lifestyle Apps, and the Nike GPS running app. It shows Zuckerberg’s times and the run times of his friends. Another app, Foodspotting, is used to find restaurants and snap pics of food item. Timeline brings them together in reports. Ticketmaster, Eventbrite and StubHub will partner with Facebook.