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Mark Zuckerberg
Facebook has reported a sharp drop in profits, partly due to increased spending on research and development.
Facebook made a profit of $64 million in the final three months of 2012, compared with $302 million a year earlier.
Revenue was up 40% at $1.6 billion, largely due to a big jump in advertising revenue, a quarter of which came from mobile platforms.
Shares in Facebook fell by almost 6% in after-hours trading in New York.
The shares launched on the Nasdaq stock exchange in May at $38, and had halved in value by September.
They have since recovered to stand at $31 at the close of trading on Wednesday. The drop in after-hours trading suggests the shares will fall back again when full trading resumes on Thursday.
“Mobile revenue was expected to be a little higher,” said analyst Aaron Kessler at Raymond James.
“Overall it’s a solid quarter but maybe [the company has suffered from] high expectations going into the quarter.”
Facebook has reported a sharp drop in profits, partly due to increased spending on research and development
Revenue from advertising was $1.3 billion, 41% up on a year earlier.
Mobile revenue, an important indicator of the company’s ability to capitalize on the growing move towards mobile platforms, accounted for 23% of overall revenue.
“In 2012, we connected over a billion people and became a mobile company,” said Mark Zuckerberg, Facebook founder and chief executive.
“We enter 2013 with good momentum and will continue to invest to achieve our mission and become a stronger, more valuable company.”
Social network founder Mark Zuckerberg, who is celebrating his first Christmas with wife Priscilla Chan after the couple tied the knot on May 19, laughed and joked during private surfing lessons on the island of Maui.
Priscilla Chan looked relaxed in a sporty, red one-piece while her billionaire husband lugged his own surfboard and worked on his tan in a pair of board shorts.
Mark Zuckerberg, 28, took time out from his role as chairman and CEO of Facebook to relax with his 27-year-old wife on the Hawaiian island, a popular tourist spot for surfing and windsurfing.
The couple chatted easily with other beach-goers before taking to the waves, where Priscilla proved herself to be an accomplished surfer.
The Zuckerbergs married in May with a ceremony in the billionaire’s backyard in Palo Alto, California. It was a joint celebration to mark Priscilla Chan’s graduation from medical school.
They honeymooned in Italy where they were pictured taking in the beauty of Rome’s Sistine Chapel and tucking into pasta in low-key restaurants.
Mark Zuckerberg and Priscilla Chan celebrate their first Christmas as married couple in Hawaii
The couple have been dating since 2003 after meeting in line for the bathroom at a frat party at Harvard University.
The beach snaps are a rare glimpse of a notoriously private couple – a luxury which was also accidentally breached by a member of Mark Zuckerberg’s own family last week.
His sister Randi posted a picture of her family jokingly reacting to Facebook’s new Poke application, and someone tweeted the picture out to the public.
She later complained that her privacy was breached on Twitter. The incident comes as Facebook has long been accused of taking advantage of users’ privacy concerns.
In the photo, Randi’s younger siblings and parents are seen in what appears to be their family home in Dobbs Ferry, New York.
Paul Ceglia, a New York businessman, has been charged with trying to defraud Facebook by claiming he was owed a 50% share of the social media company, prosecutors say.
Paul Ceglia, 39, is accused of fabricating and destroying evidence in a lawsuit asking for half-ownership of the firm.
Arrested at his home in Wellsville, New York, Paul Ceglia was due in court on Friday afternoon.
Attorney Preet Bharara said the entrepreneur had been chasing a “quick payday based on a blatant forgery”.
In 2003, Facebook founder Mark Zuckerberg, then a Harvard University student, agreed to do programming work for Paul Ceglia and his fax business, say prosecutors.
Paul Ceglia is accused of fabricating and destroying evidence in a lawsuit asking for half-ownership of Facebook
Paul Ceglia later filed his lawsuit claiming that he and Mark Zuckerberg had signed a two-page contract awarding him a 50% stake in Facebook.
But Mark Zuckerberg said he had not yet conceived the idea for the social network at the time.
Facebook’s lawyers said the contract that Paul Ceglia and Mark Zuckerberg signed in 2003 was to develop street-mapping software.
Paul Ceglia subsequently doctored the document to insert Facebook references, it is alleged.
Facebook has now surpassed one billion people using it every month, the company has said.
The passing of the milestone was announced by founder Mark Zuckerberg on US television on Thursday.
The company said that those billion users were to date responsible for 1.13 trillion “likes”, 219 billion photos and 17 billion location check-ins.
The site, which was launched in 2004, is now looking towards emerging markets to build its user base further.
“If you’re reading this: thank you for giving me and my little team the honor of serving you,” Mark Zuckerberg wrote in a status update.
“Helping a billion people connect is amazing, humbling and by far the thing I am most proud of in my life.”
Statistics released to coincide with the announcement revealed there were now 600 million users accessing the site via a mobile device – up 48 million from 552 million in June this year.
Since its early beginnings at Harvard University, Facebook users have befriended each other 140.3 billion times.
Sustained growth is seen as crucial if Facebook is to maintain its value – the company has seen its share price drop to about $22 from a starting price of $38.
Investors will expect the company to look at ways to make more from the users it already has as well as seeking to attract new users in areas of the world where it does not yet dominate.
“For Facebook the main challenge is not just to grow in terms of numbers, but more importantly to deepen and enrich engagements,” said Eden Zoller, principal analyst at tech research firm Ovum.
Although the service is by far the world’s biggest social network, there are key areas, such as China and Russia, where local competitors still remain the online networking tool of choice.
Last month, Mark Zuckerberg visited Moscow, where he made his first TV chat show appearance, as well as a highly publicized meeting with the Prime Minister, Dmitry Medvedev.
It was a public-relations exercise designed to unsettle VKontakte – a network that boasts in excess of 300 million members, compared with Facebook’s seven million, in the country.
In the same trip, Mark Zuckerberg made a “surprise” visit to one of the company’s arranged hack-a-thons to meet local developers.
Other trips include to China, where the company said it was busy “watching and learning” from other internet firms.
Google, which launched in China in 2005, faced fierce criticism when it agreed to allow censorship of search results. It later changed its stance, and now directs all of its traffic through its Hong Kong-based site.
Success for Facebook in China would mean unseating RenRen (more than 30 million users) and possibly the Twitter-like service Sina Weibo (more than 300 million users).
In Africa, Facebook has targeted the use of basic phones – known widely as “feature phones” – which are unable to display the full-featured site, but instead can use specially created variations of the network.
Specifically, a project called Facebook for Every Phone, which was launched following the company’s acquisition of feature-phone specialists Snaptu, is central to its growth strategy in the region.
“Facebook is doing very well in Africa,” said Erik Hersman, a Kenyan-based blogger.
“You even see people using it in the rural areas – often people will ask for a phone with Facebook on it, not caring/knowing about the internet at all.”
There are considerable monetization opportunities too. The continent has, at a pace far outstripping the west, adopted mobile payment systems in huge numbers – more than 15 million in Kenya alone.
In developed markets, one path to better engagement with users could be through new features that make use of Facebook’s vast quantities of personal data about each of its members.
In recent weeks, Facebook has been looking to monitor the real-world effects of advertising on the platform.
These efforts are key if the company is to convince businesses that investing in the platform is not a waste of money – recent admissions over “fake” users and have dented the site’s credibility.
It has enlisted the help of US market research firm Datalogix to try to produce evidence that seeing an advert on Facebook – without necessarily clicking on it – is enough of an engagement to get people buying products in shops.
However, this vast data bank is tricky to utilize, according to Ovum’s Eden Zoller.
“There’s no doubt that Facebook is sitting on a potential goldmine of customer data,” she said.
“But that goldmine can also be a minefield. We know that Facebook, despite its claims to the contrary, constantly pushes the boundaries of what’s seen as acceptable in regards to data privacy.”
This goldmine could swell further. In the UK, ministers are said to be considering using Facebook, among other services, to act as official identification for accessing public services online.
Such advancements are being noted by data regulators. In Europe in particular, Facebook has been faced with increased demands to tighten data privacy practices.
The company, which has based its European headquarters in Ireland, was last month told by the Irish Data Protection Commissioner, Billy Hawkes, that it must amend its Phototag feature – a tool powered by facial recognition software.
Following an extensive audit, the commission also sought extra assurances from Facebook over issues surrounding account deletion and targeted advertising.
As it continues to innovate and evolve, the company would need to get used to finding itself audited and investigated, said Eden Zoller.
“They’re so high-profile,” she said.
“They’re a bit of a poster boy, but they could be a whipping boy if they’re not careful.”
Facebook evolution
Facebook at one billion:
• Median user age: 22
• Top countries (alphabetical order): Brazil, India, Indonesia, Mexico, United States
• Mobile users: 600 million
At 500 million (July 2010):
• Median user age: 23
• Top countries: Brazil, India, Indonesia, Mexico, United States
• Users who joined the site at this point now have an average of 305 friends
At 100 million (August 2008):
• Median user age: 23
• Top countries: Chile, France, Turkey, United Kingdom, United States
• Users who joined the site at this point now have an average of 334 friends
At 50 million (October 2007):
• Median user age: 26
• Top countries: Australia, Canada, Turkey, United Kingdom, United States
• Users who joined the site at this point now have an average of 321 friends
At 25 million (January 2006):
• Median user age: 19
• Top countries: Australia, Canada, Germany, United Kingdom, United States
• Users who joined the site at this point now have an average of 598 friends
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Noah Kagan, one of Facebook’s first ever employees, was forced to leave the up-and-coming social network in 2006, and he missed out on a payday which could have totaled $100 million.
Noah Kagan, who is now running online startup AppSumo, was the 30th employee at Facebook when he was hired by founder Mark Zuckerberg as a product manager.
At the time, Facebook was a scrappy newcomer – Noah Kagan says: “Most decisions were me walking over to Mark’s desk for approval.”
And many employees were deeply devoted to the company – not least the young project manager who had graduated from Berkeley two years earlier.
“Facebook was my entire life,” he writes in the blog post explaining how he came to be fired.
“My social circle, my validation, my identity and everything was tied to this company.”
Noah Kagan also pays tribute to his fellow employees, most of whom were graduates of – or dropouts from – elite Ivy League universities.
“I’ve NEVER been around such smart people,” he says.
“I’ve never felt so consistent like I wasn’t the smartest person in the room.”
However, while he may have been enjoying his time at Facebook, Noah Kagan was apparently not always the most popular figure in the room.
“I wanted attention, I put myself before Facebook,” he says.
“I hosted events at the office, published things on this blog to get attention and used the brand more than I added to it.”
Moreover, as the firm grew, it changed from an entrepreneurial organization to more of a bureaucratic behemoth – and Noah Kagan failed to change with it.
He writes on his blog of his frustration at having to go through a secretary every time he wanted to see Mark Zuckerberg, and admits that in big meetings he “zoned the f*** out”.
But the last straw was when Facebook changed its membership policy to allow non-students to have accounts, and Noah Kagan leaked the information to a journalist.
While partying at the Coachella festival, he emailed a contact asking him to publicize the information as soon as the change was made the next day – but the journalist wrote a story on it that same night.
Noah Kagan was called in for a meeting with Matt Cohler, then Facebook’s head of product management, and told that he had become a “liability” to the company after eight months working there.
He was marched back to the office, where he had his telephone and computer taken away.
At the time he was devastated, and he now claims that it took him a year to get over the pain of rejection.
You might think that that pain would only have got worse over the years, as Facebook grew and this year’s IPO turned many of its earliest employees into multi-millionaires.
Yet even though he estimates he could have earned $100 million if he had stayed at the company, Noah Kagan insists he has no regrets.
Having worked at web firms such as Mint.com and KickFlip before starting AppSumo, he says of his departure from Facebook: “It is what it is.”
“Ultimately, I appreciate where I am now and all the experiences I got from NOT being there.”
Technology titan Bill Gates has been listed by Forbes magazine as the wealthiest American for the 19th year in a row, with a fortune of $66 billion, up $7 billion from last year.
There was no change in the order of the top five richest from a year earlier.
The total wealth of the US super-rich grew 13% to $1.7 trillion, with the top 400 worth an average $400 million more in 2012.
The group’s assets are worth as much as one eighth of the US economy, and grew much faster than the economy at large.
Bill Gates has been listed by Forbes magazine as the wealthiest American for the 19th year in a row
According to the Forbes 400 list of the richest people in America, the average net worth of a person on the list was $4.2 billion.
In second place with a fortune of $46 billion was investment guru Warren Buffett, who is chairman and chief executive of the insurance conglomerate Berkshire Hathaway.
He was followed by Larry Ellison, head of software maker Oracle Corp, worth $41 billion.
David and Charles Koch of the energy and chemical business group Koch Industries were tied in fourth place with $31 billion.
The majority of those on Forbes‘ list became richer in 2012. Two hundred and forty-one members of the group saw their wealth increase, while just 66 saw it shrink.
Casino magnate Sheldon Adelson and financier George Soros dropped from the ranks of the top 10 into 12th place compared with a year ago.
But the biggest drop was seen by Facebook founder and chief executive, Mark Zuckerberg, who fell from 14th to 36th place in the wake of a disappointing stock market listing of his company.
He lost nearly half his fortune, which is now worth an estimated $9.4 billion.
Four members of one family – the heirs to the Walmart fortune – are in the top 10.
Top 10 Forbes list:
1. Bill Gates, co-founder and chairman of Microsoft, $66 billion
2. Warren Buffett, chairman and chief executive of Berkshire Hathaway, $46 billion
3. Larry Ellison, co-founder and chief executive of Oracle, $41 billion
4. Charles Koch, chairman and chief executive of Koch Industries, $31 billion
5. David Koch, co-owner and executive vice-president of Koch Industries, $31 billion
6. Christy Walton & family, heiress to Walmart fortune, $27.9 billion
7. Jim Walton, heir to Walmart fortune and chairman of Arvest Bank, $26.8 billion
8. Alice Walton, heiress to Walmart fortune, $26.3 billion
9. S Robson Walton, heir to Walmart fortune, $26.1 billion
10. Michael Bloomberg, founder and principal owner of Bloomberg LP, $25 billion.
Mark Zuckerberg, the boss of social network Facebook, has spoken for the first time of the drop in his company’s market value.
Mark Zuckerberg called the drop in his firm’s value “disappointing”. The value of its shares is almost half the $38 debut price in May.
But he vowed that Facebook will make more money on phones than on desktops.
“Over the next three to five years, the biggest question on everyone’s mind is really going to be how well Facebook does with mobile.”
Speaking at the TechCrunch Disrupt conference in San Francisco, Mark Zuckerberg said: “Literally, six months ago we didn’t have an ad on mobile.”
Speaking at the TechCrunch Disrupt conference in San Francisco, Mark Zuckerberg called the drop in Facebook's value disappointing
Earlier this year, Facebook launched native apps for Apple’s iOS smartphones and its Android rival by Google.
“Ads have to be more integrated into the product on mobile,” Mark Zuckerberg said.
In another exchange, he joked: “Everything I do breaks, but I fix it quickly.”
Facebook is the world’s most popular social network with 950 million users.
When asked of constant rumors that he was building a Facebook phone, he rejected the speculation and pointed to the site’s huge reach.
“If we make a phone we could get maybe 10 million users? Twelve million users? That doesn’t move the needle for us.
“Building a phone is the wrong strategy for us.”
He admitted the fall in Facebook’s share price had made it harder to find and retain staff.
“It doesn’t help,” he said.
“There are tons of people that are super-pessimistic,” Mark Zuckerberg said.
“I would personally rather be underestimated. It gives us latitude to go out and make some big bets.”
Since their debut at $38 in May, Facebook shares have lost 49% of their value. They closed at $19.43 on Tuesday.
Mark Zuckerberg owns about 444 million Facebook shares plus an option to issue another 60 million.
Last month, Peter Thiel, a venture capitalist and one of Facebook’s earliest backers, sold much of his stake and made more than $1 billion in total from his investment.
The internet is abuzz after pictures of Mark Zuckerberg emerged as we have never seen him before – topless and hanging out with a load of other topless guys.
TMZ posted the picture today which shows Mark Zuckerberg caressing his hairy – and quite buff – chest while obviously having a very good time cavorting with the other men.
The jury is out on what exactly is going on in the picture or where it was taken and Facebook have yet to respond to a request for comment.
The photo surfaced on the image-sharing site imgur, posted anonymously by someone who says they screen grabbed it from Facebook.
They claim the picture was “accidentally posted” by Facebook Director of Engineering Andrew Bosworth – who is seen also topless at the far right of the picture sporting a very masculine hat and bow tie combo.
Andrew Bosworth allegedly deleted the picture “seconds later”, but obviously not fast enough, as someone was able to capture it and make it available to the world wide web.
If this was an accident, many Facebook users will find something bitter sweet about the leak after Mark Zuckerberg and his team have repeatedly changed the site’s privacy settings over the years, which included claiming the rights to all pictures posted on the social networking site.
On the other hand, the picture isn’t going to do Mark Zuckerberg’s image any harm. After all appearing quite buff – for a computer nerd – hanging out shirtless with a few similarly shirtless friends shows the billionaire is just like everyone else, right?
Mark Zuckerberg caressing his hairy chest while obviously having a very good time cavorting with the other topless men
Coincidentally, the picture has emerged on the same day the Federal Trade Commission voted to finalize its settlement with Facebook, resolving charges that the social network exposed details about users’ lives without getting the required legal consent.
Facebook Inc. didn’t admit wrongdoing, but agreed to submit to government audits of its privacy practices every other year for the next two decades.
The company also committed to getting explicit approval from users before changing the types of content it makes public.
The settlement, announced in November, is similar to agreements the FTC reached separately with Google Inc. and Myspace.
The FTC approved the settlement Friday after a public comment period. It came a day after the FTC fined Google $22.5 million to resolve allegations that Google didn’t comply with the earlier settlement.
Both Facebook and Google have vast amounts of data on their users – Facebook through the things people share on the site, and Google through the searches and other things people do.
Such information is valuable because it can be used to improve the lucrative targeted advertising pitches that both companies aim at users.
Over the years, Facebook has been pushing users to voluntary share more about themselves. That ultimately encourages users and their friends to spend more time on the site, which in turn allows Facebook to sell more ads.
Although Facebook boasts that it gives users a variety of software settings so they can decide which photos, links and updates to share with whom, the company changes those options on a regular basis.
Much of the FTC’s complaint against Facebook centers on a series of changes that the company made to its privacy controls in late 2009.
The revisions automatically shared information and pictures about Facebook users, even if they previously programmed their privacy settings to shield the content.
Among other things, people’s profile pictures, lists of online friends and political views were suddenly available for the world to see, the FTC alleged.
The complaint also charges that Facebook shared its users’ personal information with third-party advertisers from September 2008 through May 2010 despite several public assurances from company officials that it wasn’t passing the data along for marketing purposes.
Facebook believes that happened only in limited instances, generally when users clicked on ads that appeared on their personal profile pages.
Most of Facebook’s users click on ads when they are on their “Wall” – a section that highlights their friends’ posts – or while visiting someone else’s profile page.
Under the settlement, Facebook must get explicit consent – a process known as “opting in” – before making changes that override existing privacy preferences.
The company also may not make misrepresentations about the privacy or security of users’ personal information – a broad clause that led to Google’s fine on Thursday.
Violations will be subject to civil penalties of up to $16,000 per day for each infringement.
Facebook had no comment beyond a statement that it is pleased the settlement received final approval.
The company’s stock gained 52 cents, or 2.5%, to $21.53 in midday trading Friday. Facebook, based in Menlo Park, California, began trading publicly in mid-May, after the settlement with the FTC was reached.
Amid a flurry of lawsuits over Facebook’s IPO, Morgan Stanley, the company’s top underwriter, says it’s prepared to pay back investors who were burned when they bought shares.
Morgan Stanley announced in a memo on Wednesday that it is reviewing Facebook trades and would adjust prices for some retail customers who overpaid.
The IPO mishaps have sparked numerous lawsuits against Morgan Stanley, the NASDAQ stock exchange and Facebook itself by shareholders who claimed they hid the social networking company’s weakened growth forecasts just before it went public.
The allegations raised questions about whether top investors profited at the expense of smaller buyers.
Meanwhile, Facebook is in talks with the New York Stock Exchange to move its stock from the NASDAQ Stock Market after the botched IPO on Friday, according to a person familiar with the matter.
The person spoke on the condition of anonymity because they were not authorized to speak publicly.
Facebook’s much-anticipated IPO was delayed by a half-hour on Friday because of technical glitches on the NASDAQ.
Morgan Stanley announced in a memo on Wednesday that it is reviewing Facebook trades and would adjust prices for some retail customers who overpaid
After pricing at $38, Facebook’s stock closed up 23 cents on Friday and has been down since. On Wednesday, it closed up $1, at $32, still down nearly 16% from the IPO price.
NYSE declined to comment.
The news comes as even Facebook CEO Mark Zuckerberg dumped his own shares in the company, making $1.13 billion as the stock nosedived, according to company filings.
On Wednesday, shareholders filed a lawsuit against Facebook and the banks behind the company’s stock, Morgan Stanley and Goldman Sachs.
Additionally, both the Securities and Exchange Commission and the Financial Industry Regulatory Authority have begun looking into the matter.
The U.S. Senate Banking Committee has also launched an inquiry and the state of Massachusetts has subpenaed Morgan Stanley, demanding answers.
The House Financial Services Committee said that it was also gathering information for their own review.
Facebook stock rose 3.3% in trading on Wednesday, rising to $32 a share.
However, a new analysis said the stock could fall to as low as $9.59.
That’s a far cry from the $37.58 that Zuckerberg fetched for 30.2 million shares he unloaded on Friday.
By the end of trading on Tuesday however the price had dropped to $31 meaning Zuckerberg saved himself a cool $174 million by getting out early.
Mark Zuckerberg, 28, still holds a vast amount of Facebook stock but his decision to sell off so much will leave investors wondering about his confidence in the company.
The drop is based around the realization that Facebook might not be growing as quickly as initially thought. And the company’s second-quarter growth will likely fall short of expectations as fewer new users join the social networking giant.
Shareholders filed a lawsuit on Wednesday, alleging that Mark Zuckerberg, Facebook and the banks that backed the Initial Public Offering, Morgan Stanley and Goldman Sachs, knew this information, but weren’t forthcoming with it.
On Tuesday, Reuters revealed that the banks’ analysts downgraded their estimates about the future earnings of the company while they were rolling out the IPO.
Business Insider called the move “unprecedented”.
Furthermore, the website reported that the banks revealed to privileged major investors that the share price was likely to tank, but left smaller stock buyers in the dark about this information.
The Securities and Exchange commission is investigating these allegations and the state of Massachusetts has filed a subpoena demanding Morgan Stanley release information about the IPO.
Facebook founder and CEO Mark Zuckerberg and his long-time girlfriend Priscilla Chan tied the knot at a small ceremony at his home in Palo Alto, California, a day after $104 billion IPO.
Priscilla Chan, 27, also had a busy week, graduating from medical school on Monday, as Zuckerberg marked his 28th birthday.
The guests believed they were going to celebrate Priscilla Chan’s graduation – but found they were at a wedding instead.
The wedding ring, a “very simple ruby”, was designed by Mark Zuckerberg.
Mark Zuckerberg weds Priscilla Chan in secret ceremony after $104 bn IPO
Nine years ago the pair met at Harvard, where Mark Zuckerberg founded Facebook in 2004.
They later moved to California, where Facebook has its headquarters, and Priscilla Chan studied at the medical school of the University of California, San Francisco.
Facebook’s valuation after its flotation on Friday means the social network site is worth about the same as internet shopping giant Amazon, and more than the value of stalwarts such as Disney.
Even after the flotation, Mark Zuckerberg continues to control just under 56% of the voting power of the company.
The NASDAQ exchange saw Facebook shares jumping more than 10% within minutes of making their stock market debut.
Facebook shares rose to $42, having been initially priced at $38 each, before falling back to trade flat.
Mark Zuckerberg, 28, who started Facebook while at university, remotely opened trading on the Nasdaq earlier.
He appeared via a video link from a celebration at the firm’s headquarters in California.
There had been a delay of about half an hour in the start of trading in Facebook shares, which analysts say reflected the huge demand for the stock.
The $38 initial share price values the eight-year-old social network site at $104 billion.
Strong demand had led the company to increase both the price and the number of shares available for sale.
Facebook’s owners are releasing just under a fifth of the company’s total shares, about 421 million, which could raise about $18 billion.
The site is largely used for social updates, and although Facebook has said its use on mobile devices are the key to new profits, analysts question how much room there is for advertising on such platforms.
The NASDAQ exchange saw Facebook shares jumping more than 10 percent within minutes of making their stock market debut
Car giant General Motors added to those doubts by saying on Tuesday that it would no longer pay to advertise on the site.
Online strategy consultant Atul Chitnis said the question was whether Facebook had a strategy to bring advertisers in.
“My belief is that Facebook does have a strategy, they are ready with something they have not yet talked about,” he said.
“How effective it is we will have to watch and see.”
He also said he expected to see a “brief burst” of the share price going up and then “sinking again” in a couple of days.
Facebook’s valuation means the social network site is worth about the same as internet shopping giant Amazon, and more than the value of stalwarts such as Disney.
The initial public offering (IPO) of the shares is the third-largest in US history, after the financial giant Visa and General Motors.
Facebook employees had been up all night ahead of the event, taking part in a “hackathon” at the company’s headquarters in Menlo Park, California.
It is an event in which programmers work on projects and come up with new ideas.
Facebook’s profits are tiny in relation to its size – it makes about $5 a year for each of its 900 million users – and its plans to increase profitability are unclear.
Oliver Pursche, president of Gary Goldberg Financial Services, said ahead of the flotation: “We’re telling our investors to hold off.
“Number one, we don’t know what the guts and the balance sheet of the company looks like yet so that’s a big red flag for us. We want to understand the business before we tell people to invest.”
Facebook also faces concerns over privacy.
Indeed, on Friday a class action suit was brought against the company in the US for “improperly tracking the internet use of its members even after they logged out of their accounts”.
Facebook itself has previously warned about the possible impact of evolving legal protections across the world on consumer privacy, and specifically a revision to the European Union’s privacy laws.
Other internet companies have had mixed experiences when they have started selling shares.
Online games maker Zynga’s shares fell 5% on their first day of trading in December 2011.
But shares in business networking site LinkedIn more than doubled on their debut in May last year and are still trading well above that level, while Groupon shares jumped 30% on their debut in November.
However, they have since fallen back, particularly after the daily deals firm admitted in April that it had overstated its previous revenues and earnings.
Facebook’s flotation had an immediate impact on the value of these companies, as their share prices fell at the same time as Facebook’s fell back from its initial spike.
Groupon dropped 5.6%, LinkedIn fell 1.2%, while shares in Zynga were suspended after plunging more than 13% in a matter of minutes.
The new Facebook shareholders will not have much say in how the business is run.
The shares on offer are “A” shares, which carry one vote per share, as is normal, but the current owners’ shares are “B” shares, which carry 10 votes each.
They will control more than 96% of the votes after the flotation, with founder Mark Zuckerberg holding just under 56% of the voting power of the company.
Mark Zuckerberg, who owns about 25% of the company, stands to gain the most from taking Facebook public. Fellow founders Dustin Moskovitz and Eduardo Saverin will also become paper-billionaires overnight, as will Napster founder and former employee Sean Parker.
US venture capital firm Accel Partners and Russian internet investment group Digital Sky Technologies also hold significant stakes in Facebook, while software giant Microsoft and U2 frontman Bono also stand to make a huge profit on their investment in the company.
[googlead tip=”patrat_mare” aliniat=”centrat”]Mark Zuckerberg’s (Facebook CEO and co-founder) sister, Randi Zuckerberg, Marketing Director at Social Networking site Facebook has resigned from the Company on 3rd of August 2011.
She has been working for Facebook for last six years.
Randi Zuckerberg
Randi Zuckerberg or RaZu as her closest friends call her – will reportedly be starting her own company called RtoZ Media, where she’ll channel her experience as Facebook’s marketing director, according to her resignation letter.
Randi Zuckerberg is leaving Facebook because of her desire to become an entrepreneur:
“Now is the perfect time for me to move outside of Facebook to build a company focused on the exciting trends underway in the media industry,“ she wrote.
RtoZ will be a social media firm which intends to help companies become more social, and Randi plans to thoroughly utilize Facebook to make her startup a success.
The news has been confirmed by Facebook saying,
“We can confirm Randi has decided to leave Facebook to start her own company. We are all grateful for her important service.”
However, there has been no comment from the side of Mark Zuckerberg yet.
Her resignation has created a buzz all around as she was working with the firm right from the day it started and was a high profile personality of Silicon Valley.
[googlead tip=”patrat_mare” aliniat=”centrat”]
Randi Zuckerberg has been out on maternity leave the past few months; she likely used the time away to reflect on her own goals.
She gave birth to a child recently, for which she was on a three months leave,
“This allowed her to think better about the next phase of her career,” told sources close to her.
“Her resignation from Facebook will put on new chances to work in a better relations with other social media’s and there is no doubt that she’ll take on Google+ as a client,” source added.
Randi Zuckerberg submitted her resignation letter to Facebook COO Sheryl Sandberg and communications head Elliot Schrage:
“I am thankful for the strong mentorship, guidance, and support, which is empowering me to follow my dreams and show that you don’t have to be an engineer to be a hacker.”
She also ended her resignation letter with a smiley-face emoticon, which we can all agree will ensure her a great referral from Sheryl Sandberg and Elliot Schrage.
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See Randi Zuckerberg full resignation letter here.Randi-Zuckerberg-Resignation-Letter
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