Facebook files for IPO

Facebook has announced plans to float on the stock market, having filed papers seeking to raise $5bn (£3bn) in an initial public offering.

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The move could value the world’s largest social network at up to $100bn (£64bn) – roughly the same as McDonald’s – and will be the biggest technology IPO since Google’s in 2004.

The regulatory filing gave the biggest insight yet into the business and revealed that Facebook made a $1bn (£631m) profit in 2011.

The company made revenues of $3.71bn (£2.3bn) in the year, 85% of which comes from advertising. Users’ payments on Zynga social games accounted for approximately 12% of Facebook’s revenue and the remainder comes from transactions fees for other virtual goods on the site.

The eight year old social network has 845 milllion active users worldwide, up 39% on 2010. More than 483m users visit the site daily, up 48% year on year.

In a letter accompanying the Securities and Exchange Commission S-1 filing, Facebook founder Mark Zuckerberg said the social network is hoping to improve how people connect to businesses and the economy.

“We think a more open and connected world will help create a stronger economy with more authentic businesses that build better products and services,” he added.

Zuckerberg’s wealth could be valued at more than $22bn (£13.9bn) once the site, in which he owns a 28% stake, goes public.

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