The Philippine Online Chronicles

Business and technology giants are awaiting for what could be the largest debut for a U.S. company – the anticipated initial public offering of Facebook, that now has an estimate valuation of $75 billion to $100 billion.

The eight-year old social networking site that has more than 800 million members worldwide, could file for IPO paper work as early as Wednesday next week, according to Wall Street Journal. The deal is expected to raise $10 billion. Facebook's IPO will be larger than Google Inc., which raised $1.9 billion in 2004 at a $23 billion valuation.

Reports state that Morgan Stanley is a strong front-runner to be the lead underwriter for the IPO while Goldman Sachs is expected to play a significant role in the deal. The social networking company is close to selecting Morgan Stanley to take the 'lead-left position' in the IPO road show. Morgan Stanley tech banking team is also the top Internet stock underwriter for the IPOs of LinkedIn Corp., Groupon Inc., and Zynga Inc. last year.

Representatives for Facebook, Morgan Stanley and Goldman Sachs declined to comment on the reports. Facebook spokesperson Larry Yu said, "I'm sorry, but we're not participating in speculation around an IPO."

Facebook's final valuation will be determined by a variety of factors, including investor demand for social media, the IPO market and the health of the European economy. New York firm PrivCo estimates that Facebook will price its stock between $38 and $40.

PrivCo also expects Facebook to select the New York Stock Exchange (NYSE) rather the tech heavy NASDAQ on which recent IPOs from Groupon, Zynga and others have debuted. PrivCo research shows that Facebook’s NYSE ticker expected to be “FB.”

The IPO would provide funds to help Facebook maintain its expansion and fend off competition from Internet rivals such as Google Inc. and Twitter Inc, Bloomberg reported.

The news of Facebook's anticipated public offering resulted to soaring price of shares of internet and social-networking companies. As of Friday, LinkedIn closed at 5.9 per cent higher at $76.64 and Zynga gained 5.6 per cent to $10.05. GSV Capital, an investment firm that owns Facebook shares, jumped 17.8 per cent to $17.79.

With the $10 billion expected offering, Facebook's IPO would rank fourth for U.S. companies, behind Visa Inc., General Motors Co. and AT&T Wireless, according to Dealogic. At a $100 billion valuation, Facebook would be worth about the same as McDonald's Corp. and nearly half of Google.

Facebook decided to wait until 2012 for its IPO to give the company more time to gain users and boost sales, people familiar with the matter said in 2010.

Menlo Park millionaires

If the IPO pushes through, Facebook will soon create over 1,000 new millionaires, most of them employees of the Menlo-based social networking company.

According to Business Insider, Facebook's valuation exploded in a way that few dared to predict. In 2007, it got a $15 billion valuation. In 2009, a Russian billionaire invested $100 million at a $10 billion valuation. At the end of 2011, Goldman Sachs invested at a $50 billion valuation.

Facebook's revenues are mostly from advertising. In first half of 2011, Facebook doubled its revenues to $6.1 billion while net income reached almost $500 million.

In December 2011, Gawker.com leaked unconfirmed information about Facebook's finances. The report said Facebook made $714 million on revenue of $2.5 billion for the first three quarters of 2010, with no debt. Gawker's source also claims that the majority of shares in the company are owned by the employees, with 30 percent. Zuckerberg has 24 percent of the shares on the company.

From January to September 2011:

Assets: $5.6 billion

Cash/cash equivalents: $3.5 billion

Debt: $0

Shareholder equity: $4.5 billion

Operating cashflow: $1 billion

Revenue: $2.5 billion

Operating income: $1.2 billion

Net income: $714 million

Ownership: Employees 30%, Mark Zuckerberg 24%, Digital Sky Technologies 10%, Accel Partners 8% (had 10% but sold 2%), Dustin Moskowitz 6%, Eduardo Saverin 5%, Sean Parker 4%, Goldman Sachs clients 3%, Microsoft 1.3%, Peter Thiel and/or Clarium Capital 3%, Greylock Partners 1.4%, Meritech Capital Partners 1.6%, Chris Hughes 1 %, Li Ka-shing .75%, Interpublic Group .50%,, Goldman Sachs .8%.

Facebook's Timeline

A former Harvard dropout, Facebook Chief Executive Mark Zuckerberg was listed by Forbes.com as the world's youngest billionaire. At 27, he is worth $17.1 billion and now America's 14^th richest man.

Here is Facebook's brief history according to WSJ:

February 2004

Mark Zuckerberg launches thefacebook.com from his Harvard College dorm room. Mark Zuckerberg spoke at Facebook headquarters in Palo Alto, Calif., July 6, 2011. (Paul Sakuma/Associated Press)

Mid-2004

Investor Peter Thiel loans $500,000 to thefacebook.com that would eventually convert into a 10.2% equity stake in the company.

September 2004

Harvard classmates Tyler and Cameron Winkelvoss and Divya Narendra file a lawsuit in federal court alleging Mr. Zuckerberg stole the idea for thefacebook.com from them.

May 2005

The social-networking company obtains $12.7 million in funding, led by venture-capital firm Accel Partners, which values the company at $100 million.

August 2005

Thefacebook.com becomes Facebook.

September 2006

Facebook considers selling itself to Yahoo for $1 billion.

September 2006

Facebook opens registration on its site to anyone over the age of 13.

August 2007

Facebook launches Platform, which lets outside developers build online services that work within its website.

September 2007

Facebook launches News Feed, a feature that aggregates news about friends' activity on the site, sparking widespread outrage and the first of many concerns over the site's approach to user privacy.

October 2007

Microsoft invests $240 million in Facebook at a $15 billion valuation.

November 2007

Concerns from privacy advocates grow over Facebook's launch of Beacon, a feature that tracks user activity outside of the site and shows it to friends.

March 2008

Top Google executive Sheryl Sandberg joins Facebook as chief operating officer.

May 2009

Russian Internet firm Digital Sky Technologies offers to invest $200 million in Facebook at a $10 billion valuation.

June 2009

Facebook hires former Genentech CFO David Ebersman as CFO.

January 2011

Goldman Sachs Group leads a $1.5 billion funding round in Facebook at a $50 billion valuation.

September 2011

Facebook announces that it has more 800 million monthly visitors.

Late 2011

Facebook executives eye an IPO for the first half of 2012 that would raise as much as $10 billion and place a more than $100 billion valuation on the company.