We learned a lot of things about Facebook today from its IPO filing. But there is one detail that sticks out for its improbable exactness: The $1.000 billion in profits Facebook reported for 2011.
The number wasn’t $998 million. It wasn’t $1.003 billion. It was $1.000 billion right on the dot.
Is this just a happy coincidence, or did Zuckerberg “manage” earnings to make a statement? Companies have many different accounting levers they can pull to slightly adjust their reported earnings.
With that very precise number Zuckerberg is telling Wall Street that number is completely under his control. Investors like companies with that kind of leeway because it signals predictability. It is also nearly ten times Google’s profits of $106 million the year before its IPO.
I am not sure where it ranks in terms of profits for an IPO, but I would not be surprised if it the highest of any tech company ever.
And, of course, it’s a lesson in what’s really cool. It’s the ultimate comeback to Hollywood’s caricature of Facebook.
Facebook is the world’s largest social network, with over 1 billion monthly active users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students. It was a huge hit: in 2 weeks, half of the schools in the Boston area began demanding a Facebook network. Zuckerberg immediately recruited his friends Dustin Moskovitz, Chris Hughes, and Eduardo Saverin to help build Facebook, and within four months, Facebook added 30 more college networks. The original...
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