Facebook has released its highly anticipated SEC documents, paving the way for what is expected to be a US$5 billion Initial Public Offering.
The documents reveal for the first time what many have long speculated – the true value of its 845 million users and the scale of advertising revenue it generates.
But the documents also detail how critical international expansion is to its future success and why it must diversify against intense competition from Google+, Cyworld in Korea, Mixi in Japan, Orkut (owned by Google) in Brazil and of course China, where platforms like Renren, Sina and Tencent dominate the market.
The firm acknowledged that its success depends heavily on its ability to expand internationally but China remains a large roadblock.
“We continue to evaluate entering China,” the company said. “However, this market has substantial legal and regulatory complexities that have prevented our entry into China to date.”
“We do not know if we will be able to find an approach to managing content and information that will be acceptable to us and to the Chinese government.”
Facebook is currently available in more than 70 different languages, and it operates offices or data centers in more than 20 different countries. Across Asia, India, Indonesia, Philippines and Thailand are its core markets.
“If we fail to deploy or manage our operations in international markets successfully, our business may suffer,” Facebook in the document said.
Despite this, the company’s numbers are impressive.
The company now boasts 845 million monthly users and 483 million daily users; annual revenues of US$3.7 billion; $1.8 billion in annual operating income and $1 billion net income.
Facebook is seeking to raise US$5 billion in its Initial Public Offering and shares are expected to begin trading in May when the listing paperwork is finalised.