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Facebook may be preparing for a $10B IPO

Facebook may be preparing for a $10B IPO

January 30, 2012 | By Eric Caoili

Facebook is reportedly preparing to file for an initial public offering as early as this week and for as much as $10 billion, which would make it one of the biggest openings ever for a U.S. company.

The predicted $10 billion IPO, which is ten times what social game developer Zynga (FarmVille, CityVille) debuted at in mid-December to a cool reception, would value the company between $75 billion and $100 billion.

While a $75 billion valuation would be below what many analysts initially expected, the IPO would be the fourth largest for a U.S. outfit, behind companies like Visa, General Motors, and AT&T.

Google's IPO opened at $1.9 billion with a $23 billion value in 2004, the same year Facebook launched. If the social network debuts with a $100 billion valuation, it would be worth half as much as Google, and around as much as McDonald's.

The final valuation could be determined by various factors such as investor demand, the IPO market, and even the health of the European economy, according to The Wall Street Journal.

Facebook reported having more than 800 million active users around the world as of September 2011, dwarfing rival social networks like MySpace, Google+, and Tagged. A significant portion of that 800 million plays social games on the site.

Its huge audience helped set off an explosion of new developers producing social games that cater to those users in recent years -- and several high-profile acquisitions from traditional game publishers of those studios, like Electronic Arts' $300 million Playfish purchase.

The Wall Street Journal's sources say Facebook could file its IPO documents with the Securities and Exchange Commission as early as Wednesday, but the site's executives are considering other timetables, and could delay it for a few weeks.

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