Facebook Revealed: IPO Coming 2009 End?

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Kara Swisher of BoomTown had some juicy details to reveal today about Facebook, apparently as blabbingly told to all by founder and CEO Mark Zuckerberg at an employee meeting in Palo Alto Theater. For the record, most of these details are the root of all that question-dodging, executive talk, and light awkwardness in his 60 minute piece and many of the recent keynotes discussions he’s been involved in. Eric Schonfeld of TechCrunch put all these details in a neat list, which I’ll very creditingly steal for Rev2 readers instead of creating my own (again, very creditingly):

  •  2007 Revenues: $150 million
  • 2008 Revenues: $300 to $350 million (projected)
  • 2007 Headcount: 450
  • 2008 Headcount: 1,000 (projected)
  • 2008 Capital Expenditures: $200 million (i.e., servers)
  • 2008 EBITDA (earnings before interest, taxes, depreciation and amortization): $50 million
  • 2008 Cash Flow (EBITDA – CapEx): negative 150 million.

The most interesting detail, of course, is the fact that Facebook will be running at a negative 150 million cashflow for 2008, despite Zuckerberg’s comments that “something we’ve tried to with Facebook ever since the early days is run at break-even.” Of course, as Swisher points out in her post, that is only because of the recent $300 million Microsoft investment that gives them the thin-air $15 billion valuation.

After playing with some of those figures in my head, I think we can safely expect an IPO around late 2009/early 2010. Call me naive, but if they’re able to run at a -$150 million cashflow and their Microsoft investment gives them $300 million (not to mention any forthcoming ones over the next year) — tell me that doesn’t make clear leeway for an IPO in two years!

Regardless of whether they’ll be running at a break-even or a negative cashflow, one thing is for sure: if Facebook is to IPO, with a $15 billion+ valuation, their current revenues aren’t going to cut it. Through Ads or Beacon, they’re yet to find that killer strategy to make them susceptible to be a successful — or at least profitable — company later on. And with a deadline of 2010, time’s running out.


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