Facebook Updates S-1: 901 Million Users, $1.06 Billion In Revenue, 23 Million Shares To Instagram

Facebook has amended its

S-1 filing to include a range of new facts and data. Below are some of the more interesting details that I was able to find on my first review of the revised document.

Revenue & Users

In the first quarter this year Facebook made $1.058 billion. That was up from $731 million a year ago but down from Q4 2011. In 2011 as a whole the company made $3.71 billion. Ad revenue in Q1 was $872 million; “fees and payments” revenue was $186 million. The company has $3.9 billion cash on hand.

Facebook also disclosed that 15 percent of Q1 2012 revenue came from Zynga:

Thirteen percent and 11% of our total revenue for the first quarter of 2011 and 2012, respectively, came from a single customer, Zynga. This revenue consisted of Payments processing fees related to Zynga’s sale of virtual goods and from direct advertising purchased by Zynga. Additionally, Zynga’s apps generate pages on which we display ads from other advertisers; for the first quarter of 2012, we estimate that an additional approximately 4% of our total revenue was generated from the display of these ads.

The following are the newest usage statistics from Facebook:

1. We had 901 million [monthly active users] MAUs as of March 31, 2012, an increase of 33% as compared to 680 million MAUs as of March 31, 2011.

2. We had 526 million daily active users (DAUs) on average in March 2012, an increase of 41% as compared to 372 million DAUs in March 2011 . . . we had on average 398 million users who were active with Facebook on at least six out of the last seven days

3. We had 488 million MAUs who used Facebook mobile products in March 2012, and we surpassed 500 million mobile MAUs as of April 20, 2012.

4. On average more than 300 million photos per day were uploaded to Facebook in the three months ended March 31, 2012.

5. Our users generated an average of 3.2 billion Likes and Comments per day during the first quarter of 2012.

6. As of March 31, 2012, there were more than 42 million Pages with ten or more Likes . . .

Instagram & Microsoft Patents

Facebook is paying $300 million in cash and 23 million shares in common stock for Instagram. There’s a $200 million kill fee if the deal doesn’t get regulatory approvals or if either party terminates the deal.

Facebook also said it plans to keep the Instagram app/identity as a separate product: “Following the closing of this acquisition, we plan to maintain Instagram’s products as independent mobile applications to enhance our photos product offerings and to enable users to increase their levels of mobile engagement and photo sharing.”

In terms of the Microsoft patent deal announced this morning, which is a transfer of the AOL patents earlier acquired by Microsoft, Facebook is paying Redmond a whopping $550 million in cash. It’s getting 650 patents and patent applications and licensing them all back to Microsoft:

Also, in April 2012, we entered into an agreement with Microsoft Corporation pursuant to which we will be assigned Microsoft’s rights to acquire approximately 650 patents and patent applications that are subject to the agreement between AOL Inc. and Microsoft entered into on April 5, 2012, in exchange for a total cash payment of approximately $550 million. As part of this transaction, we will obtain a license to the other AOL patents and patent applications being purchased by Microsoft and will grant Microsoft a license to the AOL patents and patent applications that we acquire . . .

The $400 Billion Market Opportunity

Facebook sees itself grabbing a chuck of the $363 billion in TV, print and radio advertising that addresses brands and awareness marketing. The company also says that online display, mobile advertising and payments (though it’s more ambiguous here) are big opportunities for Facebook, although mobile is called out as a risk factor.

In all, more than $400 billion in ad spending is identified by Facebook as being within the company’s orbit and potential reach.

Mobile a Risk Factor

Notwithstanding the company’s acquisition of Instagram it sees mobile as a major risk factor (some of this is real concern, some is boilerplate disclosures):

1. Growth in use of Facebook through our mobile products, where our ability to monetize is unproven, as a substitute for use on personal computers may negatively affect our revenue and financial results.

2. Facebook user growth and engagement on mobile devices depend upon effective operation with mobile operating systems, networks, and standards that we do not control.

There are no doubt more interesting discoveries in the S-1 to be made, and we’ll update this post or post separately on those items later.

Postscript: Many articles and posts are now focused Facebook’s apparently slowing growth, as well as rising costs for the company. The WSJ says, “At a potential valuation of about $100 billion out of the gate, Facebook will be under pressure to quickly justify that sum to investors.” Exactly.

This is essentially why Facebook will be forced to enter the realm of search marketing (at least on Facebook.com). There’s too much money that’s being “left on the table.” In addition it may also be compelled to build an AdSense-like network beyond the boundaries of the site.