Mark Zuckerberg’s Facebook is a £64bn fortune

By CLAIRE GARDNER
Published on Monday 30 January 2012 00:00

SOCIAL networking giant Facebook is poised to make its stock market debut, valuing the company at up to £63.5 billion.

n what is anticipated to be one of the largest technology deals ever, the social media website with more than 800 million users around the world would raise around £6.3bn in the move.

The company is expected to file papers with the US financial watchdog on Wednesday.

A valuation of around £63.5bn would be the largest technology valuation in history and make Facebook one of the world’s biggest companies.

Media tycoon Rupert Murdoch wrote on Twitter: “Facebook a brilliant achievement, but $75-$100bn? Would make Apple look really cheap.”

It is thought Morgan Stanley will be the lead underwriter for the sale, with Goldman Sachs also expected to be heavily involved.

Rumours of Facebook’s so-called initial public offering (IPO) have circulated for many months but the company has made no statement on the subject.

The company was started by Mark Zuckerberg and fellow students at Harvard University in 2004 and has quickly grown to become one of the world’s most popular websites.

It makes most of its money through advertising and boasts on its website that of its 800 million active users more than half log on to every day.

Other statistics issued by Face-book claim the average user has 130 “friends” and that more than 250 million photographs are uploaded on to its site every day. As a private company, Facebook does not have to publish its accounts, but reports in January last year suggested a document sent by Goldman Sachs to its clients showed the firm made a net profit of more than £200m in the first nine months of 2010

“The big advantage to a flotation for Facebook is money,” says Sam Hamadeh, chief executive of PrivCo, an analyst specialising in private companies.

“Facebook has tended to ‘acqui-hire’ talent – that is, buying small companies to add to its talent pool. The IPO will give it cash to buy firms and compete with Google, which has $50bn on hand.”

However, he said the stock market move would open the company up to closer scrutiny.

“You have to deliver every quarter,” he said. “Other tech companies, including Google, have tried to shake off the tyranny of managing a business for the quarterly results, but ultimately if you go public, you end up playing the game.

“For a little while it’s cute, but not for long. And it’s not just institutional shareholders who lose patience: staff with shares do too.”

In a recent interview, Mr Zuckerberg admitted he would like the eight-year-old firm to be seen as other technology giants such as Apple, Intel and Microsoft.

As a private company, Facebook is limited to having just 500 shareholders.

The US regulator, the Securities and Exchange Commission, has put the company under pressure to disclose how many people have a stake in the company.

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