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Facebook began in 2004 as a way for Harvard University students to communicate
Facebook unveils $5bn stock market flotation plans
The world's largest social networking site, Facebook, has announced plans for a stock market flotation.
Facebook said it would seek to raise $5bn (£3.16bn, 3.8bn euros),
about half the amount many analysts expected.
But the initial public offering (IPO) is still expected
to be the biggest sale of shares by an internet company.
Facebook, just eight years old and started by Harvard
University students, now has 845 million users and
made a profit of $1bn last year.
Facebook filed its intention to float with the Securities and
Exchange Commission after the US stock markets closed.
The documents revealed for the first time information about
the company that had previously been the subject of speculation.
This included news that Facebook's net income in 2011 rose
65% to $1bn, off revenues of $3.71bn.
It was disclosed that founder Mark Zuckerberg owns 28.4%
of Facebook, and also that the network now has 845 million
monthly users and 443 million daily users.
A letter from Mr Zuckerberg said: "Facebook was not originally
created to be a company. It was built to accomplish a social mission
- to make the world more open and connected.
"We think it's important that everyone who invests in Facebook understands
what this mission means to us, how we make decisions and why we do the things we do."
The $5bn being raised would be the most for an
internet initial public offering since Google and its early backers raised $1.67bn in 2004.
"The company is a lot more profitable than we thought,"
said Kathleen Smith, principal of IPO investment advisory firm Renaissance Capital.
She said Facebook's numbers were "very impressive,"
but she added that Facebook needed to talk more about where
it saw its growth coming from.
"What new areas of business is it expecting to pursue beyond display ads?" she said.
The final amount Facebook will raise is likely to change as
Facebook's bankers gauge the investor demand for the shares over the coming months.
The story of the company was made the subject of a 2010 Hollywood film,
The Social Network, and the firm has made the verb "to friend" a part of everyday language.
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