The day has finally come as many has long predicted and hoped: Facebook today filed its S1 registration. We're combing through the numbers at present—we'll update as we get a better grasp on the figures—but here are the initial highlights.
Net income for 2011 reached $1 billion in 2011, on revenue of $3.7 billion, up from $606 million on revenues of $1.97 billion in 2010. Unsurprisingly, the vast majority of Facebook revenue comes from advertising—roughly $3.2 billion in ad revenue in 2011. Revenues from payments generated only $557 million; remarkably, 12% of Facebook's revenue come from Zynga.
As many outlets had previously reported, Facebook indicated in its filling it sought to raise $5 billion, and will have the ticker "FB."
Facebook has $3.9 billion cash on hand, and the company also revealed in its filing specific usership figures: 845 million monthly users at the end of 2011, with roughly half of those users active on a daily basis. Facebook is now seeing more than 250 million photos uploaded to the service everyday.
The filing also gave more insight into Facebook's shareholders—the IPO Player's Club, as we're calling it. CEO Mark Zuckerberg owns an astounding 28.4% of Facebook. At a valuation of $100 billion, that would mean Zuck's stake would be worth roughly under $30 billion. Other top shareholders include, of course, Peter Thiel, who stands to make about $2.2 to $2.5 billion from his shares.
In terms of salary, Zuck's base was set at $500,000 in 2011, not including stock options or bonus. He will reduce his salary to $1 in 2013. Facebook CEO Sheryl Sandberg had a base salary of $300,000 in 2011.
Facebook gave more insight into its competition as well, describing Google and Google+ as one of its main competitors—more fuel for the Great Tech War of 2012. Other competition, Facebook said in its filing, came from Microsoft and Twitter, "which offer a variety of Internet products, services, content, and online advertising offerings, as well as from mobile companies and smaller Internet companies that offer products and services that may compete with specific Facebook features." These might include startups such as Instagram and Foursquare.
In a letter to prospective investors, Zuck also took the time to tell them about the "hacker way," harkening back to our 2007 profile on the Facebook founder.
The Hacker Way
As part of building a strong company, we work hard at making Facebook the best place for great people to have a big impact on the world and learn from other great people. We have cultivated a unique culture and management approach that we call the Hacker Way.
The word “hacker” has an unfairly negative connotation from being portrayed in the media as people who break into computers. In reality, hacking just means building something quickly or testing the boundaries of what can be done. Like most things, it can be used for good or bad, but the vast majority of hackers I’ve met tend to be idealistic people who want to have a positive impact on the world.
The Hacker Way is an approach to building that involves continuous improvement and iteration. Hackers believe that something can always be better, and that nothing is ever complete. They just have to go fix it — often in the face of people who say it’s impossible or are content with the status quo.
Hackers try to build the best services over the long term by quickly releasing and learning from smaller iterations rather than trying to get everything right all at once. To support this, we have built a testing framework that at any given time can try out thousands of versions of Facebook. We have the words “Done is better than perfect” painted on our walls to remind ourselves to always keep shipping.
Hacking is also an inherently hands-on and active discipline. Instead of debating for days whether a new idea is possible or what the best way to build something is, hackers would rather just prototype something and see what works. There’s a hacker mantra that you’ll hear a lot around Facebook offices: “Code wins arguments.”
Hacker culture is also extremely open and meritocratic. Hackers believe that the best idea and implementation should always win — not the person who is best at lobbying for an idea or the person who manages the most people.
To encourage this approach, every few months we have a hackathon, where everyone builds prototypes for new ideas they have. At the end, the whole team gets together and looks at everything that has been built. Many of our most successful products came out of hackathons, including Timeline, chat, video, our mobile development framework and some of our most important infrastructure like the HipHop compiler.
To make sure all our engineers share this approach, we require all new engineers — even managers whose primary job will not be to write code — to go through a program called Bootcamp where they learn our codebase, our tools and our approach. There are a lot of folks in the industry who manage engineers and don’t want to code themselves, but the type of hands-on people we’re looking for are willing and able to go through Bootcamp.