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Industry Sector |
Information Technology |
Published |
2 February 2012 |
Author |
Paul Chapman |
Type of News |
Financials |
Facebook's S-1 form reveals some interesting data. One of the interesting snippets is that Zynga accounted for 12% of its revenue. This is effectively payment processing feeds from selling Zynga's games and from advertising by Zynga. On top of this, Zynga's apps generate advertising revenue. In May 2010, Facebook entered into an addendum to its terms and conditions with Zynga, where Zynga agreed to use Facebook Payments as the primary means of payment within Zynga games played on the Facebook Platform. Facebook retains 30% of the revenue related to Zynga sales, a deal which ends in May 2015. Facebook Payments became mandatory for all game developers accepting payments on the Facebook Platform with limited exceptions on July 1, 2011.
Facebook generated 85% of its revenues from advertising in 2011 (it was 98% in 2009), demonstrating that payment processing via the website is likely to become a strong secondary source of revenues for the company. In total, Facebook generated $3.7 billion in revenues for 2011, with a net income of $1 billion.
The social network says it has 845 million active users, which are growing particularly strongly in Brazil and India. Facebook is restricted in China, so has zero penetration of Internet users in that country. Facebook says it spent $388 million on research and development and $427 million on marketing and sales. A lot of the R&D expenditure relates to the investment in data centres that were specifically designed for Facebook. Facebook employs 3,200 as of 2011. Facebook has also had 56 issued patents and 503 filed patent applications in the United States and 33 corresponding patents and 149 filed patent applications in foreign countries relating to social networking, web technologies and infrastructure, and related technologies.
The three senior executives in Facebook are Mark Zuckerberg, Sheryl K. Sandberg and David A. Ebersman. Sheryl K. Sandberg has served as Chief Operating Officer since March 2008. From November 2001 to March 2008, Ms Sandberg served in various positions at Google, Inc., most recently as Vice President, Global Online Sales & Operations. David A. Ebersman has served as Chief Financial Officer since September 2009. Prior to joining us, Mr. Ebersman served in various positions at Genentech, Inc., a biotechnology company, including as its Chief Financial Officer from March 2005 and as an Executive Vice President from January 2006 until April 2009, following Genentech's acquisition by F. Hoffmann-La Roche Ltd. in March 2009. Mark Zuckerberg enjoys a base salary of $500,000, on top of the value of his shares. Zuckerberg received a bonus of $220,500 for the first half 2011.
Some of the largest advertisers on Facebook are The Washington Post ($4.2 million) and Netflix ($3.8 million).
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