So I've spent basically the entire weekend reading through Facebook's S-1, which is a weird sentence to type but here we are. They filed with the SEC last Wednesday (Feb 1st) and the internet has not shut up about it since. I downloaded the PDF Wednesday night thinking I'd skim it over coffee and then somehow lost an hour and a half to it. 155 pages of legal boilerplate and it's still the most interesting thing I've read all year.
Some numbers that stuck with me: 845 million monthly active users. $3.71 billion in revenue for 2011, a billion of that as actual net income. And 2.7 billion "likes and comments" happening every single day, which is a number so big it basically stops meaning anything, but it's fun to say out loud anyway.
What actually got me though wasn't the revenue line, it was the ownership structure. Zuckerberg's holding onto around 57% of the voting power even though his direct stake is something like 22%. Dual-class stock, basically means whoever buys in on the IPO is buying a company where the founder answers to almost nobody. I get why they set it up that way back in 2009 (nobody wants a repeat of what happened at other companies when boards got twitchy), but it still feels strange to hand someone that kind of permanent grip over a publicly traded company. Maybe that's fine. Maybe it's exactly the kind of thing that keeps a company from getting sanded down into mush by a board that panics every quarter. I honestly go back and forth on it depending on the hour of the day.
The other thing nobody's really talking about as much: this filing was the first time Facebook admitted, in writing, that mobile usage without a matching mobile ad strategy is a real risk to the business. That's the line that should worry people more than the ownership stuff, if you ask me. They straight up said growth in mobile use "may negatively affect our revenue and financial results" because they haven't figured out how to make money off people scrolling on their phones instead of sitting at a desktop with a sidebar full of ads next to their newsfeed. I use Facebook almost entirely from my phone at this point and I can count on one hand the ads I've actually noticed there. That's either a huge blind spot or a huge opportunity depending on which of their engineers you ask, I guess.
Anyway. It's Sunday, it's the 5th, and the Giants and Patriots are playing tonight, which means my Twitter feed is already a disaster and the game hasn't even started yet. I saw somewhere that 30-second spots this year are going for something like $3.5 million, up from $3 million last year, and that companies are apparently planning to react in real time to what people are saying online during the broadcast. That's a genuinely new thing, as far as I know, at least at this scale. A few years ago the ad just aired and that was that. Now there's a whole second screen conversation happening alongside it and the advertisers know it and are trying to jump into it live. I don't know if I love that or if it just sounds exhausting. Probably both.
I'm not much of a football person if I'm being honest, I mostly watch for the commercials and then complain about how none of them are as good as people build them up to be in the days before. But I will say the timing of the Facebook filing landing four days before the biggest advertising night of the American year is not nothing. Everyone's going to be on their phones tonight refreshing something while the game is on, whether it's Twitter, Facebook, or just texting whoever they're watching with. That's the whole story of the last few years of the internet in one Sunday night, really. The screen in your hand matters as much as the one on the wall now, maybe more, and the companies that haven't figured out how to sell ads against that screen are the ones who should be nervous.
Going to go make some food before kickoff. If anyone actually reads the whole S-1 themselves let me know, I have opinions about the risk factors section I'd love to argue about with someone who isn't my cat.