Facebook Files for $5 Billion IPO
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Facebook Files for $5 Billion IPO

Facebook filed on Wednesday to raise a targeted $5 billion in a hotly anticipated initial public offering, setting the stage for Silicon Valley's biggest-ever IPO.

The world's largest social network, a dorm room project for Harvard dropout Mark Zuckerberg that exploded in popularity and vaulted to Silicon Valley's top tier within 8 years, said in its preliminary filing that its net income rose 65 percent to $1 billion in 2011, off revenue of $3.71 billion.

The long-awaited submission kicks off a months-long process that will culminate in Silicon Valley's biggest coming-out party since the heyday of the dotcom boom and bust.

Facebook, which said it now has 845 million active users, appointed Morgan Stanley, Goldman Sachs and JPMorgan its lead underwriters. Other bookrunners included Bank of America Merrill Lynch, Barclays Capital and Allen & Co.

"We often talk about inventions like the printing press and the television," Zuckerberg said in a letter accompanying the documents. "Today, our society has reached another tipping point."

"There is a huge need and a huge opportunity to get everyone in the world connected, to give everyone a voice and to help transform society for the future," said Zuckerberg, whose $500,000 base salary will drop to a dollar from January1 2013.

"The scale of the technology and infrastructure that must be built is unprecedented."

Facebook had previously been expected to raise $10 billion in what would have been the fourth-largest IPO in U.S. history, after Visa Inc, General Motors, and AT&T Wireless, according to Thomson Reuters data.

As expected, the prospectus underscored how the lion's share of Facebook's revenue, 85 percent, was derived from advertising in 2011. Last year, social-gaming company Zynga, the creator of Farmville, accounted for 12 percent of Facebook's revenue.

A Timeline of Facebook’s Meteoric Rise:
October 28 2003 - Mark Zuckerberg, a Harvard psychology sophomore, writes "Facemash," a website that asked users to judge students' attractiveness based on their dorm-directory photos. The authorities -- and many students -- were not amused.

February 4 2004 - Zuckerberg launches Thefacebook.com, a social network that allows users to create basic profiles including personal information and photos.

February 10 2004 - Harvard students Cameron Winklevoss, Tyler Winklevoss and Divya Narenya send Zuckerberg a cease-and-desist letter, accusing Zuckerberg of independently developing thefacebook.com while he was hired to work on their social networking project, HarvardConnection.

June 2004 - Peter Thiel, PayPal co-founder and venture capitalist, invests $500,000 in Facebook.

May 26, 2005 - Accel Partners, the venture capital firm headed by investor Jim Breyer, invests $12.7 million in Facebook, valuing the company at roughly $100 million.

October 24, 2007 - Microsoft Corp announces that it purchased a 1.6 percent share of Facebook for $240 million, giving the company a total implied value of around $15 billion.

April 7, 2008 - Facebook settles with the founders of "ConnectU", the Winklevoss twins and Divya Narendra, for a purported $65 million, according to promotional material later published by ConnectU's lawyers.

May 26, 2009 - Russian investor Yuri Milner's Digital Sky Technologies invests $200 million for a 1.96 percent stake, bringing Facebook's value down to $10 billion.

June 3, 2010 - Zuckerberg sweats profusely as he takes questions about Facebook's privacy policy while onstage at the All Things Digital conference. The episode, which the Twittering classes dubbed a "Nixon Moment," renewed questions about Zuckerberg's viability as the CEO of a company rumored to go public soon.

June 30, 2010 - In one of the more bizarre twists in Facebook's history, New York businessman Paul D. Ceglia files suit against Zuckerberg, claiming he had struck a deal with the founder in 2003 for half of Facebook's revenue and rightfully owned 84 percent of the company. Three successive lawyers withdrew from his legal team within a period of four months in late 2011. The litigation remains ongoing.

October 10, 2010 - Columbia Pictures releases "The Social Network," a film about Facebook's beginning, directed by David Fincher and written by Aaron Sorkin.

January 2, 2011 - Facebook raises $500 million from Goldman Sachs and Digital Sky Technologies in a deal that valued the company at $50 billion.

January 2011 - Goldman controversially markets as much as $1.5 billion worth of Facebook shares to its private investors, but withdraws the offer from American clients on January 18 following intense media coverage and scrutiny from the U.S. Securities and Exchange Commission. The offer was withdrawn because of accusations that it ran afoul of regulations prohibiting share-placement sponsors from aggressively promoting a deal to potential investors.

November 29, 2011 - Facebook agrees to settle Federal Trade Commission charges that it deceived users on what information it would keep private. The incident underscored how user concerns about privacy were spurring top-level government scrutiny of Silicon Valley.

January 25, 2012 - Trading of Facebook shares is halted on the secondary market as rumors of an impending IPO gain steam.

February 1, 2012 - Facebook files its Form S-1 with the Securities and Exchange Commission seeking to raise $5 billion in a highly anticipated IPO.

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