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Tag: Mark Zuckerberg

  • Priscilla Chan, Mark Zuckerberg’s Wife, Is ‘Pro-Hoodie’

    Priscilla Chan, Mark Zuckerberg’s Wife, Is ‘Pro-Hoodie’

    In her first television interview since marrying Facebook CEO Mark Zuckerberg back in May of 2012, pediatric resident Priscilla Chan answered a question that has been bugging people for years.

    Yes, she’s totally cool with all the hoodies.

    Her husband is famous for forgoing the normal business attire, instead opting for the more casual and admittedly much more comfortable hoodie. It’s kind of a Mark Zuckerberg thing. The Today Show‘s Savannah Guthrie asked her about it, and here’s what she had to say:

    “He has graduated to a nicer hoodie. The main quality about this hoodie that’s nicer is that it’s softer, so he’s really excited about that. I’m happy with whatever he wants to wear, as long as it’s appropriate for where we’re going. So he can’t wear it to weddings. And he can’t wear it to baby showers. But he can do whatever else he wants.”

    Apparently, Zuckerberg’s choice of attire is the least of her concerns as a new wife.

    “I’m pro-hoodie. He wears a fresh hoodie every day so that pretty much meets my lowest barrier for him,” she said. “I’m more concerned that he eats regularly.”

    Check out the full interview below:

    Of course, the hoodie revelation is important, but the real reason Priscilla is hitting the media circuit is to talk about the $120 million she and her husband just promised to pump into the Bay Area school system.

    “Helping improve the quality of public education in this country is something we both really care about. Priscilla has devoted her life to helping children from underserved communities as a pediatrician and as a teacher. I’ve been engaged with education issues over the past few years, and last year I taught an after-school program on entrepreneurship at a public middle school in the Belle Haven community of Menlo Park,” said Zuckerberg in a post today.

    Image via Priscilla Chan, Facebook

  • Mark Zuckerberg Gives $120M to Bay Area Schools

    Mark Zuckerberg Gives $120M to Bay Area Schools

    Facebook CEO Mark Zuckerberg has just announced that he and his wife, pediatric resident Priscilla Chan, are donating $120 million to improve Bay Area schools.

    The money will go to Zuckerberg’s Startup:Education fund, which he set up back in 2010 with a $100 million investment in the public schools of Newark, New Jersey.

    “Helping improve the quality of public education in this country is something we both really care about. Priscilla has devoted her life to helping children from underserved communities as a pediatrician and as a teacher. I’ve been engaged with education issues over the past few years, and last year I taught an after-school program on entrepreneurship at a public middle school in the Belle Haven community of Menlo Park,” writes Zuckerberg.

    And he explains his reasoning behind investing in the Bay Area in a Facebook post:

    “The Bay Area is one of the most prosperous places in the world, but there are so many schools here that don’t have the resources they need. Students from low income and minority backgrounds are the hardest hit, which means fewer end up graduating or attending college.”

    Post by Mark Zuckerberg.

    This announcement comes as some are questioning how much Zuckerberg’s previous investment in Newark’s school really helped. In a lengthy piece in The New Yorker, Dale Russakoff says that “Cory Booker, Chris Christie, and Mark Zuckerberg had a plan to reform Newark’s schools. They got an education.” Apparently, allocation of that $100 million went in large part to buying out old teacher contracts, while some went to various construction projects and other consultants. In the end, people are questioning exactly how much of Zuck’s money went to help the kids. Can more students read because of Zuckerberg’s contributions? The school district itself now faces a huge budget gap.

    Zuckerberg says that he’s learned a lot, but still has hope for the Newark school system.

    “In Newark, a lot of the work we started is still underway, but we’ve already seen some good results. Newark now has the leading teacher contract in the country that was developed with teachers to reward good performance. New district and charter schools run by organizations with a track record of success have started, including 50 new principals. Across the district, the graduation rate has grown by 10 percent. It’s still too early to see the full results in Newark, but we’re making progress and have learned a lot about what makes a successful effort,” Zuckerberg says of the donations he made to the Newark schools system.

    Zuckerberg says that the first part of the money will go to provide computers and “connectivity” in Bay Area schools, teacher training, and “leadership opportunities” for students.

    Image via Priscilla Chan, Facebook

  • Mark Zuckerberg Ordered To Court In Iran

    Mark Zuckerberg Ordered To Court In Iran

    Facebook founder and CEO Mark Zuckerberg has been ordered to appear in court in Iran to respond to complaints from Facebook users living in Iran.

    According to a judge, several Facebook users have complained that many Facebook apps including Instagram and Whatsapp violate their privacy. The judge also ordered that two Facebook apps be blocked.

    There is no extradition treaty between Iran and the United States and it is not likely that Zuckerberg will willingly go to Iran for the court case. Iranian courts have tried to block similar applications but have not been successful.

    Earlier this week a different Iranian court attempted to block Instagram but many Iranian users were still able to access the app.

    Iran is not fond of social networks and has blocked most up them including Facebook and Twitter. However, senior leaders like Foreign Minister Mohammad Javad Zarif use social networks often. Many Iranian people also use proxy servers to access their favorite social networks and other websites that have been blocked in Iran.

    Some government officials believe that Iran should offer alternatives for these social networks if they plan to block them. They feel that Iranians should have the right to use social networks if they please and that even though the government may not agree with the way American social networks are setup and operated, they could work to create new ones that meet the Iranian government’s standards.

    “We should see the cyber world as an opportunity,” The administration of moderate President Hassan Rouhani said. “Why are we so shaky? Why don’t we trust our youth?”

    The Iranian government has not said if they plan to create their own social networks and will continue to block those that they do not find acceptable.

    Do you think Mark Zuckerberg will show up in Iran to defend himself, Facebook and all social networks?

    Image via Wikimedia Commons

  • Mark Zuckerberg Turns 30, His Self-Proclaimed Cutoff Age for Youthful Intelligence

    Mark Zuckerberg Turns 30, His Self-Proclaimed Cutoff Age for Youthful Intelligence

    Back in early 2007, when he was just 22 years old and running a company of about 20 million registered users, Facebook CEO Mark Zuckerberg told a crowd at the Y Combinator Startup School event at Stanford that “young people are just smarter.”

    “Why are most chess masters under 30? I don’t know,” he said. “Young people just have simpler lives. We may not own a car. We may not have family…I only own a mattress…Simplicity in life allows you to focus on what’s important.”

    “I want to stress the importance of being young and technical. If you want to found a successful company, you should only hire young people with technical expertise,” he said.

    Now, Zuckerberg has a wife and more than a few mattresses. He also turns 30 today.

    Mark Zuckerberg has just exited his self-proclaimed window for youthful intelligence. “Move fast and break things” has been replaced with “Move fast with stable infrastructure.” Holy hell–Mark Zuckerberg is an old man now.

    Of course, Mark Zuckerberg is not old. He’s young and incredibly intelligent. He runs a company with over a billion users and basically has a billion dollars for every year he’s been alive. It’s just funny when your words come back around and give you a little nip on the ass.

    Especially considering the culture of ageism that exists in Silicon Valley, one that’s forcing people to do some pretty drastic things to get funded noticed.

    In a recent conversation with Farhad Manjoo for the New York Times, Zuckerberg deflects and refocuses when asked about turning 30.

    “…[M]ost people who use Facebook have not been my age through the majority of my time here. But understanding who you serve is always a very important problem, and it only gets harder the more people that you serve. We try to pay a lot of attention to this by a combination of very rigorous quantitative and qualitative feedback. But if you’re serving 1.2 billion people, it’s very hard.

    And I think the age thing is probably not the biggest one I worry about…”

    Zuckerberg worries about his venture internet.org, about the long-term viability of Facebook and creating “stable infrastructure.” He probably worries about a lot of things–but I’m guessing age isn’t one of them. I wonder what 22-year-old Zuck would think of 30-year-old Zuck?

    Image via Mark Zuckerberg, Facebook

  • Facebook: f8 Will Happen Every Year Now

    Facebook: f8 Will Happen Every Year Now

    Facebook’s f8 conferences have been irregular to say the least. The first one was held in May of 2007 when the company introduced the social graph. The following year, it took place in July, and Facebook introduced new profiles and Facebook Connect.

    The next conference came in April 2010. There, they introduced social plugins the Open Graph protocol, and the Graph API. In 2011, it came in September, and Facebook introduced the Timeline and a bunch of other things. Until today, that was the last time Facebook held the conference.

    It came as a surprise months ago when Facebook announced it would hold the conference again, but the surprises and unpredictability should be over.

    Mark Zuckerberg closed today’s keynote saying that the conference would return at Fort Mason. He also said to expect the event to take place around this time each year.

    Zuck called the conference, a “good opportunity to bring the whole community together.”

    Highlights from this year’s announcements include Anonymous Login, the Audience Network, App Links, and FbStart.

    Image via Facebook

  • Facebook Q1 Earnings Released, Revenue Up 72%, CFO Stepping Down

    Facebook Q1 Earnings Released, Revenue Up 72%, CFO Stepping Down

    Facebook just released its earnings for the first quarter, with revenue of $2.50 billion, up 72% year-over-year. Revenue from advertising was $2.27 billion, up 82% over that time.

    Daily active users were 802 million as of last month, up of 21% year-over-year. That’s 609 million on mobile (up 43%). Monthly active users were1.28 billion as of the end of March, up 15% year-over-year. Mobile MAUs were 1.01 billion, up 34%.

    CEO Mark Zuckerberg said, “Facebook’s business is strong and growing, and this quarter was a great start to 2014. We’ve made some long term bets on the future while staying focused on executing and improving our core products and business. We’re in great position to continue making progress towards our mission.”

    More slides here.

    The company also announced that CFO David Ebersman will be stepping down later this year. He has been in the role for five years. He will be succeeded by David Wehner, Facebook’s VP of Corporate Finance and Business Planning (and former Zynga CFO) as of June 1st. Ebersman will remain with the company through September for transition.

    “David has been a great partner in building Facebook, and I’m grateful for everything he’s done to help make the world more open and connected,” said Zuckerberg. “David set us up to operate efficiently and make the long term investments we need, and built an incredibly strong team including Dave Wehner, our next CFO. I look forward to working with Dave in his new role.”

    “This has been a tough decision because Facebook is such a great company and has such a bright future ahead, but I’ve decided to move back into healthcare where I spent my career before Facebook,” Ebersman said. “It’s been a privilege working at Facebook and being part of such a great team. We have an incredibly talented finance organization, and I have complete confidence in Dave Wehner and his ability to lead the team going forward.”

    Kara Swisher is reporting that Ebersman is likely to be focusing on moving back to the healthcare space, where he worked before joining Facebook.

    From the conference call…

    Mark said its core Facebook mobile app has over a billion users, while Messenger and Instagram have 200 million. The current priority for those two as well as WhatsApp is growth, and monetization isn’t a near-term priority. With new apps like Paper, Facebook will wait until they have 100 million before worrying about how they fit into the business model.

    App install ads have seen 350 million installs to date.

    He’s really encouraged by the feedback they’ve been seeing about ads. Not everyone is so enthusiastic.

    Here’s the release in its entirety:

    MENLO PARK, Calif., April 23, 2014 /PRNewswire/ — Facebook, Inc. (NASDAQ: FB) today reported financial results for the quarter ended March 31, 2014.

    “Facebook’s business is strong and growing, and this quarter was a great start to 2014,” said Mark Zuckerberg, Facebook founder and CEO. “We’ve made some long term bets on the future while staying focused on executing and improving our core products and business. We’re in great position to continue making progress towards our mission.”

    First Quarter 2014 Financial Summary

    Three Months Ended

     March 31,
    In millions, except percentages and per share amounts 2013 2014
    Revenue $                  1,458 $                      2,502
    Income from Operations
        GAAP $                     373 $                      1,075
        Non-GAAP $                     563 $                      1,374
    Operating Margin
        GAAP 26 % 43 %
        Non-GAAP 39 % 55 %
    Net Income
        GAAP $                     219 $                         642
        Non-GAAP $                     312 $                         885
    Diluted Earnings per Share (EPS)
        GAAP $                    0.09 $                        0.25
        Non-GAAP $                    0.12 $                        0.34

    First Quarter 2014 Operational Highlights

    • Daily active users (DAUs) were 802 million on average for March 2014, an increase of 21% year-over-year.
    • Mobile DAUs were 609 million on average for March 2014, an increase of 43% year-over-year.
    • Monthly active users (MAUs) were 1.28 billion as of March 31, 2014, an increase of 15% year-over-year.
    • Mobile MAUs were 1.01 billion as of March 31, 2014, an increase of 34% year-over-year.

    First Quarter 2014 Financial Highlights

     

    Revenue – Revenue for the first quarter of 2014 totaled $2.50 billion, an increase of 72%, compared with $1.46 billion in the first quarter of 2013.

    • Revenue from advertising was $2.27 billion, an 82% increase from the same quarter last year.
    • Mobile advertising revenue represented approximately 59% of advertising revenue for the first quarter of 2014, up from approximately 30% of advertising revenue in the first quarter of 2013.
    • Payments and other fees revenue was $237 million for the first quarter of 2014.

    Costs and expenses – GAAP costs and expenses for the first quarter of 2014 were $1.43 billion, an increase of 32% from the first quarter of 2013, driven primarily by increased headcount and infrastructure expense. Excluding share-based compensation and related payroll tax expenses, non-GAAP costs and expenses were $1.13 billion in the first quarter of 2014, up 26% compared to $895 millionfor the first quarter of 2013.

    Income from operations – For the first quarter of 2014, GAAP income from operations was $1.08 billion, up 188% compared to $373 million in the first quarter of 2013. Excluding share-based compensation and related payroll tax expenses, non-GAAP income from operations for the first quarter of 2014 was $1.37 billion, up 144% compared to $563 million for the first quarter of 2013.

    Operating margin – GAAP operating margin was 43% for the first quarter of 2014, compared to 26% in the first quarter of 2013. Excluding share-based compensation and related payroll tax expenses, non-GAAP operating margin was 55% for the first quarter of 2014, compared to 39% for the first quarter of 2013.

     

    Provision for income taxes – GAAP income tax expense for the first quarter of 2014 was $433 million, representing a 40% effective tax rate. Excluding share-based compensation and related payroll tax expenses, the non-GAAP effective tax rate would have been approximately 36%.

    Net income and EPS – For the first quarter of 2014, GAAP net income was $642 million, up 193% compared to $219 million for the first quarter of 2013. Excluding share-based compensation and related payroll tax expenses and income tax adjustments, non-GAAP net income for the first quarter of 2014 was $885 million, up 184% compared to $312 million for the first quarter of 2013. GAAP diluted EPS was $0.25 in the first quarter of 2014, up 178% compared to $0.09 in the first quarter of 2013. Excluding share-based compensation and related payroll tax expenses and income tax adjustments, non-GAAP diluted EPS for the first quarter of 2014 was$0.34, up 183% compared to $0.12 in the first quarter of 2013.

    Capital expenditures – Capital expenditures for the first quarter of 2014 were $363 million.

    Cash and marketable securities – Cash and marketable securities were $12.63 billion at the end of the first quarter of 2014.

    Free cash flow – Free cash flow for the first quarter of 2014 was $922 million.

    CFO Transition – Facebook today also announced that David Ebersman has informed the company of his intention to step down as chief financial officer after serving in the position for almost five years. On June 1, 2014, he will be succeeded as CFO by David Wehner, currently Facebook’s Vice President, Corporate Finance and Business Planning. Ebersman will remain with the company through September to ensure a seamless transition of his responsibilities.

    Wehner joined Facebook in November 2012 from Zynga, where he served as CFO. Earlier, he spent nine years at Allen & Company where he was a managing director. Wehner has a B.S. in Chemistry from Georgetown University, and an M.S. in Applied Physics from Stanford University.

    “David has been a great partner in building Facebook, and I’m grateful for everything he’s done to help make the world more open and connected,” said Zuckerberg. “David set us up to operate efficiently and make the long term investments we need, and built an incredibly strong team including Dave Wehner, our next CFO. I look forward to working with Dave in his new role.”

    “This has been a tough decision because Facebook is such a great company and has such a bright future ahead, but I’ve decided to move back into healthcare where I spent my career before Facebook,” Ebersman said. “It’s been a privilege working at Facebook and being part of such a great team. We have an incredibly talented finance organization, and I have complete confidence in Dave Wehnerand his ability to lead the team going forward.”

    Webcast and Conference Call Information

    Facebook will host a conference call to discuss the results at 2 p.m. PT / 5 p.m. ET today. The live webcast can be accessed at the Facebook Investor Relations website at investor.fb.com, along with the company’s earnings press release, financial tables and slide presentation. Facebook uses the investor.fb.com website, and intends to also use Mark Zuckerberg’s Facebook Page (https://www.facebook.com/zuck), as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

    Following the call, a replay will be available at the same website. A telephonic replay will be available for one week following the conference call at + 1 (404) 537-3406 or + 1 (855) 859-2056, conference ID 11218209.

     

    About Facebook

    Founded in 2004, Facebook’s mission is to give people the power to share and make the world more open and connected. People useFacebook to stay connected with friends and family, to discover what’s going on in the world, and to share and express what matters to them.

     

    Contacts

     

    Investors:
    Deborah Crawford
    [email protected] / investor.fb.com

    Press:
    Vanessa Chan
    [email protected] / newsroom.fb.com

    Forward Looking Statements

    This press release contains forward-looking statements regarding our future business expectations, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors including: our ability to retain or increase users and engagement levels; our reliance on advertising revenue; our ability to continue to monetize our mobile products; risks associated with new product development and their introduction as well as other new business initiatives; our emphasis on user growth and engagement and the user experience over short-term financial results; competition; litigation; privacy and regulatory concerns; risks associated with acquisitions; security breaches; and our ability to manage growth and geographically-dispersed operations. These and other potential risks and uncertainties that could cause actual results to differ from the results predicted are more fully detailed under the caption “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on January 31, 2014, which is available on our Investor Relations website at investor.fb.com and on the SEC website at www.sec.gov. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014. In addition, please note that the date of this press release is April 23, 2014, and any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result of new information or future events.

    Non-GAAP Financial Measures

    To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: revenue excluding foreign exchange effect and advertising revenue excluding foreign exchange effect; non-GAAP costs and expenses; non-GAAP income from operations; non-GAAP net income; non-GAAP diluted shares; non-GAAP diluted earnings per share; non-GAAP operating margin; non-GAAP effective tax rate; and free cash flow. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In particular, many of the adjustments to our GAAP financial measures reflect the exclusion of items, specifically share-based compensation expense and payroll tax related to share-based compensation expense, and the related income tax effects, that are recurring and will be reflected in our financial results for the foreseeable future. In addition, these measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures.

    We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business.

    We exclude the following items from one or more of our non-GAAP financial measures:

    Share-based compensation expense. We exclude share-based compensation expense because we believe that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operational performance. In particular, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FASB ASC Topic 718, we believe that providing non-GAAP financial measures that exclude this expense allows investors the ability to make more meaningful comparisons between our operating results and those of other companies. Accordingly, we believe that excluding this expense provides investors and management with greater visibility to the underlying performance of our business operations, facilitates comparison of our results with other periods, and may also facilitate comparison with the results of other companies in our industry.

    Payroll tax expense related to share-based compensation. We exclude payroll tax expense related to share-based compensation expense because, without excluding these tax expenses, investors would not see the full effect that excluding share-based compensation expense had on our operating results. These expenses are tied to the exercise or vesting of underlying equity awards and the price of our common stock at the time of vesting or exercise, which factors may vary from period to period independent of the operating performance of our business. Similar to share-based compensation expense, we believe that excluding this payroll tax expense provides investors and management with greater visibility to the underlying performance of our business operations and facilitates comparison with other periods as well as the results of other companies.

    Income tax effect of share-based compensation and related payroll tax expenses. We believe excluding the income tax effect of non-GAAP adjustments assists investors and management in understanding the tax provision related to those adjustments and provides useful supplemental information regarding the underlying performance of our business operations.

    Foreign exchange effect on revenue. We translate revenue for the three months ended March 31, 2014 using prior year exchange rates for our settlement currencies, which we believe is a useful metric that facilitates comparison to our historical performance.

    Purchases of property and equipment; Property and equipment acquired under capital leases. We subtract both purchases of property and equipment and property and equipment acquired under capital leases in our calculation of free cash flow because we believe that these two items collectively represent the amount of property and equipment we need to procure to support our business, regardless of whether we finance such property or equipment with a capital lease. We believe that this methodology can provide useful supplemental information to help investors better understand underlying trends in our business.

    For more information on our non-GAAP financial measures and a reconciliation of such measures to the nearest GAAP measure, please see the “Reconciliation of Non-GAAP Results to Nearest GAAP Measures” table in this press release.

     

    FACEBOOK, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
    (In millions, except for per share amounts)
    (Unaudited)
    Three Months Ended March 31,
    2013 2014
    Revenue $                  1,458 $                 2,502
    Costs and expenses:
         Cost of revenue 413 462
         Research and development 293 455
         Marketing and sales 203 323
         General and administrative 176 187
            Total costs and expenses 1,085 1,427
    Income from operations 373 1,075
    Interest and other income/(expense), net (20) —
    Income before provision for income taxes 353 1,075
    Provision for income taxes 134 433
    Net income $                     219 $                    642
    Less: Net income attributable to participating securities 2 3
    Net income attributable to Class A and Class B common stockholders $                     217 $                    639
    Earnings per share attributable to Class A and Class B common stockholders:
         Basic $                    0.09 $                   0.25
         Diluted $                    0.09 $                   0.25
    Weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders:
         Basic 2,386 2,545
         Diluted 2,499 2,609
    Share-based compensation expense included in costs and expenses:
         Cost of revenue $                         8 $                      12
         Research and development 117 181
         Marketing and sales 24 43
         General and administrative 21 38
            Total share-based compensation expense $                     170 $                    274
    Payroll tax expenses related to share-based compensation included in costs and expenses:
         Cost of revenue $                         1 $                        2
         Research and development 11 15
         Marketing and sales 4 4
         General and administrative 4 4
            Total payroll tax expenses related to share-based compensation $                       20 $                      25

     

    FACEBOOK, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In millions)
    (Unaudited)
    December 31, 2013 March 31, 2014
    Assets
    Current assets:
    Cash and cash equivalents $                      3,323 $                      2,998
    Marketable securities 8,126 9,631
    Accounts receivable 1,109 1,006
    Prepaid expenses and other current assets 512 425
    Total current assets 13,070 14,060
    Property and equipment, net 2,882 3,074
    Goodwill and intangible assets, net 1,722 1,682
    Other assets 221 212
    Total assets $                    17,895 $                    19,028
    Liabilities and stockholders’ equity
    Current liabilities:
    Accounts payable $                           87 $                           85
    Developer partners payable 181 188
    Accrued expenses and other current liabilities 555 525
    Deferred revenue and deposits 38 38
    Current portion of capital lease obligations 239 201
    Total current liabilities 1,100 1,037
    Capital lease obligations, less current portion 237 191
    Other liabilities 1,088 1,063
    Total liabilities 2,425 2,291
    Stockholders’ equity
    Common stock and additional paid-in capital 12,297 12,921
    Accumulated other comprehensive income 14 15
    Retained earnings 3,159 3,801
    Total stockholders’ equity 15,470 16,737
    Total liabilities and stockholders’ equity $                    17,895 $                    19,028

     

    FACEBOOK, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In millions)
    (Unaudited)
    Three Months Ended March 31,
    2013 2014
    Cash flows from operating activities
    Net income $                    219 $                       642
    Adjustments to reconcile net income to net cash provided by operating activities:
    Depreciation and amortization 233 264
    Lease abandonment 8 (13)
    Share-based compensation 170 274
    Deferred income taxes (7) (1)
    Tax benefit from share-based award activity 59 345
    Excess tax benefit from share-based award activity (62) (348)
    Other 9 9
      Changes in assets and liabilities:
    Accounts receivable 54 105
    Prepaid expenses and other current assets (1) (4)
    Other assets (36) 16
    Accounts payable 1 (10)
    Developer partners payable 21 7
    Accrued expenses and other current liabilities (33) (27)
    Other liabilities 84 26
      Net cash provided by operating activities 719 1,285
    Cash flows from investing activities
      Purchases of property and equipment (327) (363)
      Purchases of marketable securities (1,508) (2,974)
      Sales of marketable securities 699 847
      Maturities of marketable securities 903 619
      Acquisitions of businesses, net of cash acquired, and purchases of intangible assets (99) —
      Other investing activities, net 6 (1)
      Net cash used in investing activities (326) (1,872)
    Cash flows from financing activities
      Taxes paid related to net share settlement of equity awards (405) (3)
      Proceeds from exercise of stock options 8 1
      Principal payments on capital lease obligations (109) (84)
      Excess tax benefit from share-based award activity 62 348
      Net cash (used in) provided by financing activities (444) 262
    Effect of exchange rate changes on cash and cash equivalents (8) —
    Net decrease in cash and cash equivalents (59) (325)
    Cash and cash equivalents at beginning of period 2,384 3,323
    Cash and cash equivalents at end of period $                 2,325 $                    2,998
    Supplemental cash flow data
      Cash paid during the period for:
    Interest $                      12 $                           4
    Income taxes $                        9 $                         37
      Non-cash investing and financing activities:
    Net change in accounts payable and accrued expenses and other current liabilities related to property and equipment additions $                      47 $                         (3)
    Property and equipment acquired under capital leases $                      11 $                         —
    Fair value of shares issued related to acquisitions of businesses and other assets $                      33 $                         —

     

    Reconciliation of Non-GAAP Results to Nearest GAAP Measures
    (In millions, except percentages and per share amounts)
    (Unaudited)
    Three Months Ended March 31,
    2013 2014
    GAAP revenue $                1,458 $                2,502
         Foreign exchange effect on 2014 revenue using 2013 rates 9
    Revenue excluding foreign exchange effect $                2,511
    GAAP revenue year-over-year change % 72 %
    Revenue excluding foreign exchange effect year-over-year change % 72 %
    GAAP advertising revenue $                1,245 $                2,265
         Foreign exchange effect on 2014 advertising revenue using 2013 rates 9
    Advertising revenue excluding foreign exchange effect $                2,274
    GAAP advertising revenue year-over-year change % 82 %
    Advertising revenue excluding foreign exchange effect year-over-year change % 83 %
    GAAP costs and expenses $                1,085 $                1,427
         Share-based compensation expense (170) (274)
         Payroll tax expenses related to share-based compensation (20) (25)
    Non-GAAP costs and expenses $                   895 $                1,128
    GAAP income from operations $                   373 $                1,075
         Share-based compensation expense 170 274
         Payroll tax expenses related to share-based compensation 20 25
    Non-GAAP income from operations $                   563 $                1,374
    GAAP net income $                   219 $                   642
         Share-based compensation expense 170 274
         Payroll tax expenses related to share-based compensation 20 25
         Income tax adjustments (97) (56)
    Non-GAAP net income $                   312 $                   885
    GAAP and Non-GAAP diluted shares 2,499 2,609
    GAAP diluted earnings per share 0.09 0.25
         Non-GAAP adjustments to net income 0.03 0.09
    Non-GAAP diluted earnings per share 0.12 0.34
    GAAP operating margin 26 % 43 %
         Share-based compensation expense 12 % 11 %
         Payroll tax expenses related to share-based compensation 1 % 1 %
    Non-GAAP operating margin 39 % 55 %
    GAAP income before provision for income taxes $                   353 $                1,075
    GAAP provision for income taxes 134 433
    GAAP effective tax rate 38 % 40 %
    GAAP income before provision for income taxes $                   353 $                1,075
    Share-based compensation and related payroll tax expenses 190 299
    Non-GAAP income before provision for income taxes $                   543 $                1,374
    Non-GAAP provision for income taxes 231 489
    Non-GAAP effective tax rate 43 % 36 %
    Net cash provided by operating activities $                   719 $                1,285
         Purchases of property and equipment (327) (363)
         Property and equipment acquired under capital leases (11) —
    Free cash flow $                   381 $                   922

    SOURCE Facebook, Inc.

     

    Image via Facebook

  • Mark Zuckerberg Hastens the Arrival of Our Robot Overlords

    Mark Zuckerberg Hastens the Arrival of Our Robot Overlords

    If you’re impatiently waiting for computers to actually start thinking, reasoning, and feeling like humans, Facebook CEO Mark Zuckerberg and a couple of other high-profile investors have decided to help speed up the process. Zuckerberg, alongside Tesla CEO Elon Musk and Ashton Kutcher have joined for a $40 million investment in Vicarious, according to The Wall Street Journal.

    Vicarious is a company that is “building software that thinks and learns like a human.”

    More specifically, Vicarious is looking to code the human brain. Using a new computational paradigm that they call the Recursive Cortical Network, Vicarious is “developing machine learning software based on the computational principles of the human brain.”

    “Our first technology is a visual perception system that interprets the contents of photographs and videos in a manner similar to humans,” says the company.

    Vicarious was founded in 2010.

    Late last year, Vicarious touted that their AI had passed the first Turing Test by reliably solving CAPTCHAs.

    “Understanding how brain creates intelligence is the ultimate scientific challenge. Vicarious has a long term strategy for developing human level artificial intelligence, and it starts with building a brain-like vision system. Modern CAPTCHAs provide a snapshot of the challenges of visual perception, and solving those in a general way required us to understand how the brain does it,” said Vicarious co-founder Dr. Dileep George.

    Why Mark Zuckerberg? What could Facebook possibly want with software that can mimic human reasoning? Check this little bit from the WSJ’s report:

    A Facebook spokesman said Zuckerberg’s investment in Vicarious, which hasn’t been previously reported, is a personal one and does not reflect Facebook’s interest in using Vicarious software.

    Suuuuuuure…..

    PayPal founder Peter Thiel and Facebook co-founder Dustin Moskovitz are already investors in the company. They put their money in back in 2010 and 2012, respectively.

    If you want to reach me, I’ll be in my basement trying desperately to construct the eye scanner from Blade Runner.

    Image via Wikimedia Commons

  • Jimmy Kimmel Points Out All the Reasons Facebook Is Probably Ruining Your Life

    Jimmy Kimmel Points Out All the Reasons Facebook Is Probably Ruining Your Life

    As you’ve probably heard, Facebook just celebrated its 10th birthday, which means that if Facebook were a human, it would be on the cusp of entering its most-annoying years.

    In a message to Facebook users, CEO Mark Zuckerberg said the social network gives “people the power to share and stay connected, empowering people to build their own communities themselves.”

    But according to various studies, surveys, reports, and such, Facebook is probably the reason your life sucks. It’s probably why you’re depressed, and it’s probably why you can’t land a decent job. It’s also the reason your marriage is falling apart – so that’s a bummer.

    Jimmy Kimmel recently celebrated Facebook’s birthday by pointing all of this out. “If only he’d been a stoner, we’d all be fine,” said Kimmel of Zuck. If only…

    Image via Jimmy Kimmel Live, YouTube

  • Is Free Visibility On Facebook A Thing Of The Past?

    Is Free Visibility On Facebook A Thing Of The Past?

    It would appear that for most businesses, it’s only getting harder and harder to get your messages out to your fans. Remember the days when everybody was signing up for Facebook, and you had an awesome free way of getting in front of your biggest fans on a daily basis? They’d “like” your page because they liked your brand, wanted to engage with your business or get deals when you had them to offer. A marketing dream come true. Unfortunately, that dream is over.

    Due to recent changes to Facebook’s News Feed algorithm, it’s just harder than ever to actually get your updates seen. Let’s not kid each other. It’s been getting harder for years, in general, but one of these latest changes was essentially Facebook’s version of the Panda update, except that it is likely even further reaching, and doesn’t have nearly as many guidelines for establishing what should be seen vs. what shouldn’t.

    Google takes into account a variety of factors related to trust, reputation, duplicate content, spelling and factual error, attempting to put out content just for ranking, general quality control, thoroughness, etc. When Facebook launched that update, the company said that the change was “mostly oriented around source,” but that over time, it could start “distinguishing more and more” between different types of content. But as I asked back then, when does Facebook ever do anything quickly? Are you one of the few that has seen that nearly year-old “new” News Feed yet? How about the inclusion of status updates in Graph Search announced back in September? No? Me neither.

    Facebook has, however, announced additional changes to the News Feed algorithm. After that initial Facebook “panda” update, Ignite Social Media put out a report finding that brands across sizes and industries were seeing a 44% decline in organic reach on average, with some seeing declines of up to 88%. Only one saw an increase.

    Facebook has since revealed further News Feed tweaks to show users less text status updates from Pages (like businesses and brands). The News Feed now treats text status updates from pages differently than ones from regular users. According to the company, it has seen that people write more status updates (9 million more per day on average) when their friends write status updates, but the effect is not the same with updates from Pages. Therefore, they’re not going to show text status updates from pages as much.

    “We are learning that posts from Pages behave differently to posts from friends and we are working to improve our ranking algorithms so that we do a better job of differentiating between the two types,” says News Feed ranking product manager Chris Turitzin. “This will help us show people more content they want to see. Page admins can expect a decrease in the distribution of their text status updates, but they may see some increases in engagement and distribution for other story types.”

    According to Turitzin, the best way to share a link on Facebook after the update is to use a “link share.” That means using the actual link option to share, as opposed to just including the link at the end of a text update.

    Facebook link shares

    But how much of a difference will it make compared to how well link shares were doing after that other update? We haven’t seen much difference. We’ve not encountered any evidence that links are magically getting any more visibility.

    Chat Wittman, founder of EdgeRank Checker wrote a blog post comparing sites that were seeing more and less organic reach in the News Feed. A page with reach on the decline posted mostly status updates, and asked for engagement frequently. One that saw in increase posted mostly photos and rarely asked for engagement.

    Wittman suggests focusing on engagement (which is different than calls to action asking for it), analyzing why fans click “like” on your content, avoiding those calls to action, avoiding memes, analyzing outbound links to see which sources are most well received, increasing post frequency and testing different times of day for different types of content.

    To the point of increasing frequency, this is actually something that Facebook has basically endorsed itself, by the way, though obviously it’s going to depend on just what you’re posting.

    By the way, just look at this graph from EdgeRank Checker showing the decline of organic reach:

    organic reach
    Image via Moz

    If there’s a sliver of good news to any of this, perhaps it’s that Facebook’s general strategy appears to be driving users away from just the News Feed, or at least to other ways of consuming Facebook in addition to it.

    Facebook has already begun putting out standalone apps. Other than Instagram, which it acquired rather than built, Messenger is it’s most popular one, but it just launched another one called Paper (a news reader).

    This is apparently just the beginning of a larger strategy which will see Facebook launching more of these apps to take up more of your phone (or tablet’s) homescreen. Users will tap into specific parts of Facebook. Want news? Go to Paper. Want to privately chat with a friend? Go to Messenger.

    It remains to be see what other apps exactly Facebook will reveal, but Mark Zuckerberg did recently indicate that Graph Search will be coming to mobile “pretty soon“. Perhaps this will be its own app. Either way, it will present new visibility opportunities (and challenges no doubt) for businesses.

    Graph Search has significantly improved the social giant’s search capabilities, but its potential is far greater than its current functionality. In addition to the aforementioned status update functionality, mobile is a huge part of what it could be – a way to find relevant content. Location is, of course, an extremely important signal in relevancy for some types of queries, and often those related to businesses.

    Josh Constine shares an interesting quote from Zuckerberg, talking about Messenger, but more generally about Facebook’s app strategy for this year:

    “The other thing that we’re doing with Messenger is making it so once you have the standalone Messenger app, we are actually taking Messenger out of the main Facebook app. And the reason why we’re doing that is we found that having it as a second-class thing inside the Facebook app makes it so there’s more friction to replying to messages, so we would rather have people be using a more focused experience for that.”

    A similar mentality could easily be applied to any other facet of Facebook. Apply it to Paper. With Paper, news is no longer a “second class citizen” to status updates or branded messages from Pages. Perhaps it’s only a matter of time before Facebook launches a standalone app that will cater more to Pages. How about simply a “Pages” app? Would anyone use it?

    We don’t know exactly how Facebook’s going to execute this strategy, but it’s possible that some of it will actually help Pages. Of course that would detract from the sweet “pay-to-play” deal they have going now, helping to line the corporate pockets with the dollars of businesses who just want to be seen. They’ve even got a new mobile ad network in the works, which would see Facebook ads appearing in third-party apps. What incentive do they have to give brands too much free visibility?

    But different standalone apps are going to mean new things for brands to consider. Look at Instagram. Brands have fully embraced that, and it’s turned into quite an impressive marketing tool for some of them.


    Image via Instagram

    You may be thinking, yeah, but this whole app strategy is just about mobile. What about the desktop? It’s true, none of this is going to do much to change how users behave with Facebook on the desktop. Users, however, are only using Facebook on mobile devices more and more. Facebook currently has more than 556 million mobile daily active users. That’s up 49% from a year ago. It has 945 million mobile monthly active users (up 39%).

    Can Facebook get better for brands that don’t want to shell out the ad dollars? I don’t know. Things don’t look great at the moment, but this increasing focus by the company on standalone mobile apps is going to be something to pay close attention to. Perhaps there will be some opportunities to make up some of the lost visibility among Facebook users that Facebook pulled away with its News Feed updates.

  • Join Zuckerberg In Reflecting On Your Time On Facebook As It Turns 10

    Join Zuckerberg In Reflecting On Your Time On Facebook As It Turns 10

    Today marks Facebook’s tenth anniversary. Mark Zuckerberg has posted some thoughts on the last ten years, which began with going out for pizza with some friends, and sharing how excited he was about launching the product.

    There’s no mention of Facemash.

    Unfortunately, there’s no mention of any Winklevii either.

    Post by Mark Zuckerberg.

    Just for fun, we might as well reflect on another fun scene from The Social Network:

    The company has also launched a fun little personalized video tool to help you reflect on your time on Facebook too. It’s called “A Look Back,” and you can watch it here. Here’s an example of what your’e in for:

    The video recalls the personalized “year in review” Timeline they offer users.

    Image via Facebook

  • Facebook Graph Search Coming To Mobile ‘Pretty Soon,’ Says Zuck

    Facebook Graph Search Coming To Mobile ‘Pretty Soon,’ Says Zuck

    Facebook may finally be bringing Graph Search to mobile devices soon. In fact, Mark Zuckerberg said as much on the company’s earnings call during the Q&A portion on Wednesday.

    “Pretty soon, I think, you should expect us to roll out the mobile version of this,” he’s quoted as saying. “I think that that’s going to be an important step, because most of the usage of Facebook overall is on mobile, so we expect that that’s where engagement will really start to come from on Graph Search over time.”

    In its earnings report, Facebook revealed that it has 556 million mobile daily active users (up 49% year-over-year) and 945 million mobile monthly active users (39% year-over-year). 53% of the $2.34 billion in advertising revenue it made during the last quarter came from mobile.

    Graph Search, so far, has shown a lot of promise in concept, but has been rather underwhelming in execution mostly due to a combination of an extremely slow roll-out, and an even slower addition of various capabilities. For example, back in September, Facebook announced that Graph Search would start including status updates, photo captions, check-ins and comments.

    Now, four months later, some of us still don’t have access to this functionality.

    Facebook Graph Search feature not available

    Even if Graph Search does hit mobile soon, there’s no telling how long it will take for it to become available to all of Facebook’s users. A lot of people haven’t even gotten the “new” News Feed the company revealed nearly a year ago.

    Today, Facebook announced a new standalone app for news reading called Paper. This is part of a strategy the company is pursuing, offering various apps for different parts of the Facebook experience, pretty much following what they did with the launch of the Messenger app back in 2011. Perhaps a Facebook search app will be in the cards.

    Graph Search on mobile presents a potentially significant revenue stream for Facebook through mobile search ads.

    Images via Facebook

  • Facebook Earnings Are Out, Revenue Up 55% Year-Over-Year

    Facebook Earnings Are Out, Revenue Up 55% Year-Over-Year

    Facebook just released its earnings for the fourth quarter and full year 2013. This includes revenue of $7.87 billion for the year (up 55%) year-over-year. Net income for the full year 2013 was $1.50 billion.

    Revenue for the quarter was $2.59 billion (up 63% YoY). This included $2.34 billion from advertising (up 76% YoY), 53% of which was from mobile advertising (up 23%). Revenues from payments and fees were $241 million for the quarter.

    The company dropped the obligatory usage stats, including 757 million daily active users (up 22% YoY), 556 million mobile daily active users (up 49% YoY), 1.23 billion monthly active users (up 16% YoY), and 945 million mobile monthly active users (39% year-over-year).

    CEO Mark Zuckerberg said, “It was a great end to the year for Facebook. We’re looking forward to our next decade and to helping connect the rest of the world.”

    On the conference call, he said Facebook saw 6 billion likes on an average day in December. Messenger use has grown 70% in last three months, he said. There are over 500 million people using Facebook Groups. A lot of new growth is coming from tools for sharing with different sizes of people.

    Sentiment for mobile ads grew in the second half of the year even as volume grew, according to Zuckerberg.

    Next week, the company turns ten years old.

    Black Friday was the biggest mobile ad revenue day of the quarter.

    Here’s the release in its entirety:

    MENLO PARK, Calif., Jan. 29, 2014 /PRNewswire/ — Facebook, Inc. (NASDAQ: FB) today reported financial results for the fourth quarter and full year ended December 31, 2013.

    “It was a great end to the year for Facebook,” said Mark Zuckerberg, Facebook founder and CEO. “We’re looking forward to our next decade and to helping connect the rest of the world.”

    Fourth Quarter and Full Year 2013 Financial Summary                                                          

    Three Months Ended December 31, Year Ended December 31,
    In millions, except percentages and per share amounts 2012 2013 2012 2013
    Revenue $ 1,585 $ 2,585 $ 5,089 $ 7,872
    Income from Operations
    GAAP $ 523 $ 1,133 $ 538 $ 2,804
    Non-GAAP $ 736 $ 1,459 $ 2,261 $ 3,803
    Operating Margin
    GAAP 33% 44% 11% 36%
    Non-GAAP 46% 56% 44% 48%
    Net Income
    GAAP $ 64 $ 523 $ 53 $ 1,500
    Non-GAAP $ 426 $ 780 $ 1,317 $ 2,202
    Diluted Earnings per Share (EPS)
    GAAP $ 0.03 $ 0.20 $ 0.01 $ 0.60
    Non-GAAP $ 0.17 $ 0.31 $ 0.53 $ 0.88

     Full Year 2013 Business Highlights

    • Revenue for the full year 2013 was $7.87 billion, an increase of 55% year-over-year.
    • Income from operations for the full year 2013 was $2.80 billion.
    • Net income for the full year 2013 was $1.50 billion.
    • Free cash flow for the full year of 2013 was $2.85 billion.
    • Daily active users (DAUs) were 757 million on average for December 2013, an increase of 22% year-over-year.
    • Mobile DAUs were 556 million on average for December 2013, an increase of 49% year-over-year.
    • Monthly active users (MAUs) were 1.23 billion as of December 31, 2013, an increase of 16% year-over-year.
    • Mobile MAUs were 945 million as of December 31, 2013, an increase of 39% year-over-year.

    Fourth Quarter 2013 Financial Highlights

    Revenue – Revenue for the fourth quarter of 2013 totaled $2.59 billion, an increase of 63%, compared with $1.59 billion in the fourth quarter of 2012.

    • Revenue from advertising was $2.34 billion, a 76% increase from the same quarter last year.
    • Mobile advertising revenue represented approximately 53% of advertising revenue for the fourth quarter of 2013, up from approximately 23% of advertising revenue in the fourth quarter of 2012.
    • Payments and other fees revenue was $241 million for the fourth quarter of 2013.

    Costs and expenses – GAAP costs and expenses for the fourth quarter of 2013 were $1.45 billion, an increase of 37% from the fourth quarter of 2012, driven primarily by increased headcount and infrastructure expense. Excluding share-based compensation and related payroll tax expenses, non-GAAP costs and expenses were $1.13 billion in the fourth quarter of 2013, up 33% compared to $849 millionfor the fourth quarter of 2012.

    Income from operations – For the fourth quarter of 2013, GAAP income from operations was $1.13 billion, compared to $523 millionin the fourth quarter of 2012. Excluding share-based compensation and related payroll tax expenses, non-GAAP income from operations for the fourth quarter of 2013 was $1.46 billion, up 98% compared to $736 million for the fourth quarter of 2012.

    Operating margin – GAAP operating margin was 44% for the fourth quarter of 2013, compared to 33% in the fourth quarter of 2012. Excluding share-based compensation and related payroll tax expenses, non-GAAP operating margin was 56% for the fourth quarter of 2013, compared to 46% for the fourth quarter of 2012.

    Provision for income taxes – GAAP income tax expense for the fourth quarter of 2013 was $607 million, representing a 54% effective tax rate. Excluding share-based compensation and related payroll tax expenses, the non-GAAP effective tax rate would have been approximately 46%.

    Net income and EPS – For the fourth quarter of 2013, GAAP net income was $523 million, compared to $64 million for the fourth quarter of 2012. Excluding share-based compensation and related payroll tax expenses and income tax adjustments, non-GAAP net income for the fourth quarter of 2013 was $780 million, up 83% compared to $426 million for the fourth quarter of 2012. GAAP diluted EPS was $0.20 in the fourth quarter of 2013, compared to $0.03 in the fourth quarter of 2012. Excluding share-based compensation and related payroll tax expenses and income tax adjustments, non-GAAP diluted EPS for the fourth quarter of 2013 was $0.31, up 82% compared to $0.17 in the fourth quarter of 2012.

    Capital expenditures – Capital expenditures for the fourth quarter of 2013 were $483 million.

    Cash and marketable securities – Cash and marketable securities were $11.45 billion at the end of 2013.

    Webcast and Conference Call Information

    Facebook will host a conference call to discuss the results at 2 p.m. PT / 5 p.m. ET today. The live webcast can be accessed at the Facebook Investor Relations website at investor.fb.com, along with the company’s earnings press release, financial tables and slide presentation. Facebook uses the investor.fb.com website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

    Following the call, a replay will be available at the same website. A telephonic replay will be available for one week following the conference call at + 1 (404) 537-3406 or + 1 (855) 859-2056, conference ID 25168884.

    About Facebook

    Founded in 2004, Facebook’s mission is to give people the power to share and make the world more open and connected. People useFacebook to stay connected with friends and family, to discover what’s going on in the world, and to share and express what matters to them.

    Contacts

    Investors:
    Deborah Crawford
    [email protected] / investor.fb.com

    Press:
    Tucker Bounds
    [email protected] / newsroom.fb.com

    Forward Looking Statements

    This press release contains forward-looking statements regarding our future business expectations, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors including: our ability to retain or increase users and engagement levels; our reliance on advertising revenue; our ability to continue to monetize our mobile products; risks associated with new product development and their introduction as well as other new business initiatives; our emphasis on user growth and engagement and the user experience over short-term financial results; competition; litigation; privacy and regulatory concerns; security breaches; and our ability to manage growth and geographically-dispersed operations. These and other potential risks and uncertainties that could cause actual results to differ from the results predicted are more fully detailed under the caption “Risk Factors” in our Quarterly Report on Form 10-Q filed with the SEC on November 1, 2013, which is available on our Investor Relations website at investor.fb.com and on theSEC website at www.sec.gov. Additional information will also be set forth in our Annual Report on Form 10-K for the full year ended December 31, 2013. In addition, please note that the date of this press release is January 29, 2014, and any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result of new information or future events.

    Non-GAAP Financial Measures

    To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: revenue excluding foreign exchange effect and advertising revenue excluding foreign exchange effect, non-GAAP costs and expenses, non-GAAP income from operations; non-GAAP net income; non-GAAP diluted shares; non-GAAP diluted earnings per share; non-GAAP operating margin; non-GAAP effective tax rate; and free cash flow. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In particular, many of the adjustments to our GAAP financial measures reflect the exclusion of items, specifically share-based compensation expense and payroll tax related to share-based compensation expense, and the related income tax effects, that are recurring and will be reflected in our financial results for the foreseeable future. In addition, these measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures.

    We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business.

    We exclude the following items from one or more of our non-GAAP financial measures:

    Share-based compensation expense. We exclude share-based compensation expense because we believe that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operational performance. In particular, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FASB ASC Topic 718, we believe that providing non-GAAP financial measures that exclude this expense allows investors the ability to make more meaningful comparisons between our operating results and those of other companies. Accordingly, we believe that excluding this expense provides investors and management with greater visibility to the underlying performance of our business operations, facilitates comparison of our results with other periods, and may also facilitate comparison with the results of other companies in our industry.

    Payroll tax expense related to share-based compensation. We exclude payroll tax expense related to share-based compensation expense because, without excluding these tax expenses, investors would not see the full effect that excluding share-based compensation expense had on our operating results. These expenses are tied to the exercise or vesting of underlying equity awards and the price of our common stock at the time of vesting or exercise, which factors may vary from period to period independent of the operating performance of our business. Similar to share-based compensation expense, we believe that excluding this payroll tax expense provides investors and management with greater visibility to the underlying performance of our business operations and facilitates comparison with other periods as well as the results of other companies.

    Income tax effect of share-based compensation and related payroll tax expenses. We believe excluding the income tax effect of non-GAAP adjustments assists investors and management in understanding the tax provision related to those adjustments and provides useful supplemental information regarding the underlying performance of our business operations.

    Assumed preferred stock conversion. As a result of our IPO in May 2012, all outstanding shares of preferred stock were automatically converted into shares of Class B common stock. Consequently, non-GAAP diluted shares and earnings per share for the year ended December 31, 2012 have been calculated assuming this conversion for periods prior to the IPO, which we believe facilitates comparison between periods.

    Dilutive equity awards excluded from GAAP. In our calculation of non-GAAP weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders, we include unvested RSUs for the year ended December 31, 2012, the number of which is substantial due to the terms of RSUs granted prior to 2011. We believe including these awards facilitates comparison between periods.

    Foreign exchange effect on revenue. We translate revenue for the current quarter and full year ended December 31, 2013 using prior year exchange rates, which we believe is a useful metric that facilitates comparison to our historical performance.

    Purchases of property and equipment; Property and equipment acquired under capital leases. We subtract both purchases of property and equipment and property and equipment acquired under capital leases in our calculation of free cash flow because we believe that these two items collectively represent the amount of property and equipment we need to procure to support our business, regardless of whether we finance such property or equipment with a capital lease. We believe that this methodology can provide useful supplemental information to help investors better understand underlying trends in our business.

    For more information on our non-GAAP financial measures and a reconciliation of such measures to the nearest GAAP measure, please see the “Reconciliation of Non-GAAP Results to Nearest GAAP Measures” table in this press release.

     

    FACEBOOK, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
    (In millions, except for per share amounts)
    (Unaudited)
    Three Months Ended
    December 31,    		 Year Ended
    December 31,
    2012 2013 2012 2013
    Revenue $ 1,585 $ 2,585 $ 5,089 $ 7,872
    Costs and expenses:
       Cost of revenue 398 491 1,364 1,875
       Research and development 297 408 1,399 1,415
       Marketing and sales 193 292 896 997
       General and administrative 174 261 892 781
             Total costs and expenses 1,062 1,452 4,551 5,068
    Income from operations 523 1,133 538 2,804
    Interest and other income (expense), net:
       Interest expense (16) (7) (51) (56)
       Other income (expense), net (2) 4 7 6
    Income before provision for income taxes 505 1,130 494 2,754
    Provision for income taxes 441 607 441 1,254
    Net income $      64 $    523 $      53 $ 1,500
    Less: Net income attributable to participating securities – 3 21 9
    Net income attributable to Class A and Class B common stockholders $      64 $    520 $      32 $ 1,491
    Earnings per share attributable to Class A and Class B common stockholders:
       Basic $   0.03 $   0.21 $   0.02 $   0.62
       Diluted $   0.03 $   0.20 $   0.01 $   0.60
    Weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders:
       Basic 2,368 2,458 2,006 2,420
       Diluted 2,506 2,558 2,166 2,517
    Share-based compensation expense included in costs and expenses:
       Cost of revenue $        9 $      11 $      88 $      42
       Research and development 124 172 843 604
       Marketing and sales 27 42 306 133
       General and administrative 24 48 335 127
             Total share-based compensation expense $    184 $    273 $ 1,572 $    906
    Payroll tax expenses related to share-based compensation included in costs and expenses:
       Cost of revenue $        2 $       – $        5 $        1
       Research and development 16 4 53 30
       Marketing and sales 4 1 20 8
       General and administrative 7 48 73 54
             Total payroll tax expenses related to share-based compensation $      29 $      53 $    151 $      93

     

     

    FACEBOOK, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In millions)
    (Unaudited)
    December 31,
    2012    		 December 31,
    2013
    Assets
    Current assets:
    Cash and cash equivalents $                     2,384 $                     3,323
    Marketable securities 7,242 8,126
    Accounts receivable 719 1,109
    Income tax refundable 451 51
    Prepaid expenses and other current assets 471 461
    Total current assets 11,267 13,070
    Property and equipment, net 2,391 2,882
    Goodwill and intangible assets, net 1,388 1,722
    Other assets 57 221
    Total assets $                   15,103 $                   17,895
    Liabilities and stockholders’ equity
    Current liabilities:
    Accounts payable $                          65 $                          87
    Developer partners payable 169 181
    Accrued expenses and other current liabilities 423 555
    Deferred revenue and deposits 30 38
    Current portion of capital lease obligations 365 239
    Total current liabilities 1,052 1,100
    Capital lease obligations, less current portion 491 237
    Long-term debt 1,500 —
    Other liabilities 305 1,088
    Total liabilities 3,348 2,425
    Stockholders’ equity
    Common stock and additional paid-in capital 10,094 12,297
    Accumulated other comprehensive income 2 14
    Retained earnings 1,659 3,159
    Total stockholders’ equity 11,755 15,470
    Total liabilities and stockholders’ equity $                   15,103 $                   17,895

     

     

    FACEBOOK, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In millions)
    (Unaudited)
    Three Months Ended
    December 31,    		 Year Ended
    December 31,
    2012 2013 2012 2013
    Cash flows from operating activities
    Net income $     64 $    523 $       53 $ 1,500
    Adjustments to reconcile net income to net cash provided by operating activities:
    Depreciation and amortization 224 274 649 1,011
    Lease abandonment expense 1 9 8 117
    Loss on disposal or write-off of equipment 7 17 15 56
    Share-based compensation 184 273 1,572 906
    Deferred income taxes 248 (58) (186) (37)
    Tax benefit from share-based award activity 179 325 1,033 602
    Excess tax benefit from share-based award activity (179) (324) (1,033) (609)
      Changes in assets and liabilities:
    Accounts receivable (80) (233) (170) (378)
    Income tax refundable 116 (44) (451) 400
    Prepaid expenses and other current assets (38) (34) (14) (45)
    Other assets 2 (107) 2 (142)
    Accounts payable (19) 43 1 26
    Developer partners payable 14 10 (2) 12
    Accrued expenses and other current liabilities (3) 67 152 (38)
    Deferred revenue and deposits (55) 2 (60) 8
    Other liabilities 16 488 43 833
      Net cash provided by operating activities 681 1,231 1,612 4,222
    Cash flows from investing activities
      Purchases of property and equipment (198) (483) (1,235) (1,362)
      Purchases of marketable securities (1,717) (3,069) (10,307) (7,433)
      Sales of marketable securities 1,529 555 2,100 2,988
      Maturities of marketable securities 920 609 3,333 3,563
      Investments in non-marketable equity securities 1 – (2) (1)
      Acquisitions of businesses, net of cash acquired, and purchases of intangible assets – (131) (911) (368)
      Change in restricted cash and deposits – (15) (2) (11)
      Net cash provided by (used in) investing activities 535 (2,534) (7,024) (2,624)
    Cash flows from financing activities
      Net proceeds from issuance of common stock – 1,478 6,760 1,478
      Taxes paid related to net share settlement of equity awards (2,862) (183) (2,862) (889)
      Proceeds from exercise of stock options 8 6 17 26
      Proceeds from long-term debt, net of issuance cost 1,496 – 1,496 –
      Repayment of long-term debt – – – (1,500)
      Proceeds from sale and lease-back transactions – – 205 –
      Principal payments on capital lease obligations (135) (100) (366) (391)
      Excess tax benefit from share-based award activity 179 324 1,033 609
      Net cash (used in) provided by financing activities (1,314) 1,525 6,283 (667)
    Effect of exchange rate changes on cash and cash equivalents 4 1 1 8
    Net (decrease) increase in cash and cash equivalents (94) 223 872 939
    Cash and cash equivalents at beginning of period 2,478 3,100 1,512 2,384
    Cash and cash equivalents at end of period $   2,384 $ 3,323 $     2,384 $ 3,323
    Supplemental cash flow data
      Cash paid during the period for:
    Interest $       8 $        5 $       38 $      38
    Income taxes $        – $      21 $     184 $      82
          Cash received during the period for:
    Refund of income taxes $   131 $        2 $     131 $    421
      Non-cash investing and financing activities:
    Net change in accounts payable and accrued expenses and other current liabilities related to property and equipment additions $     40 $      22 $      (40) $      53
    Property and equipment acquired under capital leases $     89 $         – $     340 $      11
    Fair value of shares issued related to acquisitions of businesses and other assets $        – $         – $     274 $      77

     

     

     

    Reconciliation of Non-GAAP Results to Nearest GAAP Measures
    (In millions, except percentages and per share amounts)
    (Unaudited)
    Three Months Ended
    December 31,    		 Year Ended
    December 31,
    2012 2013 2012 2013
    GAAP revenue $ 1,585 $ 2,585 $  5,089 $ 7,872
       Foreign exchange effect on 2013 revenue using 2012 rates 2 22
    Revenue excluding foreign exchange effect $ 2,587 $ 7,894
    GAAP revenue year-over-year change % 63% 55%
    Revenue excluding foreign exchange effect year-over-year change % 63% 55%
    GAAP advertising revenue $ 1,329 $ 2,344 $  4,279 $ 6,986
       Foreign exchange effect on 2013 advertising revenue using 2012 rates 2 22
    Advertising revenue excluding foreign exchange effect $ 2,346 $ 7,008
    GAAP advertising revenue year-over-year change % 76% 63%
    Advertising revenue excluding foreign exchange effect year-over-year change % 77% 64%
    GAAP costs and expenses $ 1,062 $ 1,452 $  4,551 $ 5,068
       Share-based compensation expense (184) (273) (1,572) (906)
       Payroll tax expenses related to share-based compensation (29) (53) (151) (93)
    Non-GAAP costs and expenses $    849 $ 1,126 $  2,828 $ 4,069
    GAAP income from operations $    523 $ 1,133 $     538 $ 2,804
      Share-based compensation expense 184 273 1,572 906
      Payroll tax expenses related to share-based compensation 29 53 151 93
    Non-GAAP income from operations $    736 $ 1,459 $  2,261 $ 3,803
    GAAP net income $      64 $    523 $       53 $ 1,500
       Share-based compensation expense 184 273 1,572 906
       Payroll tax expenses related to share-based compensation 29 53 151 93
       Income tax adjustments 149 (69) (459) (297)
    Non-GAAP net income $    426 $    780 $  1,317 $ 2,202
    GAAP diluted shares 2,506 2,558 2,166 2,517
       Assumed preferred stock conversion1 – – 203 –
       Dilutive equity awards excluded from GAAP1 – – 110 –
    Non-GAAP diluted shares 2,506 2,558 2,479 2,517
    GAAP diluted earnings per share $   0.03 $   0.20 $    0.01 $   0.60
       Net income attributable to participating securities – – 0.01 –
       Non-GAAP adjustments to net income 0.14 0.11 0.59 0.28
       Non-GAAP adjustments to diluted shares – – (0.08) –
    Non-GAAP diluted earnings per share $   0.17 $   0.31 $    0.53 $   0.88
    GAAP operating margin 33% 44% 11% 36%
       Share-based compensation expense 12% 11% 31% 12%
       Payroll tax expenses related to share-based compensation 2% 2% 3% 1%
    Non-GAAP operating margin 46% 56% 44% 48%
    GAAP income before provision for income taxes $    505 $ 1,130 $     494 $ 2,754
    GAAP provision for income taxes 441 607 441 1,254
    GAAP effective tax rate 87% 54% 89% 46%
    GAAP income before provision for income taxes $    505 $ 1,130 $     494 $ 2,754
    Share-based compensation and related payroll tax expenses 213 326 1,723 999
    Non-GAAP income before provision for income taxes $    718 $ 1,456 $  2,217 $ 3,753
    Non-GAAP provision for income taxes 292 676 900 1,551
    Non-GAAP effective tax rate 41% 46% 41% 41%
    Net cash provided by operating activities $    681 $ 1,231 $  1,612 $ 4,222
       Purchases of property and equipment (198) (483) (1,235) (1,362)
       Property and equipment acquired under capital leases (89) – (340) (11)
    Free cash flow $    394 $    748 $       37 $ 2,849
    1Gives effect to assumed preferred stock conversion and other dilutive equity awards prior to our IPO for comparability

     

     

    SOURCE Facebook, Inc.

    Image via Facebook

  • Mark Zuckerberg Uses Jelly To Ask About A Spider In His Shower

    Mark Zuckerberg Uses Jelly To Ask About A Spider In His Shower

    Apparently Mark Zuckerberg is using Jelly, the new social Q&A app from Twitter co-founder Biz Stone. He used it over the weekend to take a picture of a spider in his bathroom, and ask:

    “What kind of spider is this, and is it okay to let it keep living in my shower?”

    Kevin Thau, Jelly’s COO (formerly VP of Business Development at Twitter), responded to Zuck’s question, “I think it’s a Phidippus johnsoni. Probably want to relocate it out of the house,” linking to a Wikipedia article about the spider.

    Jelly Spider

    Stone tweeted about this particular use of Jelly:

    Jelly has only been out for a week, and already we’ve seen two Mark Zuckerberg-related storylines. The first time was when a user took to Jelly to show what looked to be a picture of him texting and driving.

    Image via Jelly

  • Mark Zuckerberg May Have Been Caught Texting and Driving by a Jelly User

    Mark Zuckerberg May Have Been Caught Texting and Driving by a Jelly User

    Celebrities – they’re just like you!

    Yesterday, Twitter co-founder Biz Stone pulled the tarp off his newest project, Jelly – a new mobile service that we first heard about way back in March of last year. In short, Jelly is a question and answer app that allows users to snap photos with their phones and then ask “what is this?” of their social media buddies. In other words, Jelly is another way to crowdsource the Q&A.

    Jelly calls itself “a new way to search,” but most people are still trying to figure out exactly what the hell they’re supposed to do with it.

    This. This is most likely what people are supposed to do with it – catch high-profile CEOs breakin’ the law, breakin’ the law.

    Let’s all take a look at the photo above, which was posted by a Jelly user and found by Valleywag’s Sam Biddle.

    “Mark Zuckerberg texting and driving. How do you respond?” Ok, now let’s analyze.

    – Is he really on the road? Could he be in a parking lot? Well, the red light and the street sign in the shot definitely suggest that Zuck is stopped at a red light while “texting.” That’s still illegal, by the way.

    – Ok, what if he’s not really texting? Sure, Zuck could be talking on speakerphone, checking his Facebook, or even changing the song on Spotify…doesn’t matter. Still illegal.

    – What if it’s not even Mark Zuckerberg? Fair point. It sure looks like him though. An who doesn’t trust a Jelly user? If you can’t trust a Jelly user, then what do we have left, America?

    The point here is not that Mark Zuckerberg may have been caught texting while driving on a brand new app that the entire tech world is currently trying to figure out. The point here is that we still don’t have a clear answer to the biggest question surrounding Jelly. Why?

    Image via Valleywag

  • Facebook Lawsuit: Plaintiffs Say The Company Reads Users’ Private Messages

    Facebook Lawsuit: Plaintiffs Say The Company Reads Users’ Private Messages

    Are your private messages being read by Facebook? On Dec. 30. 2013 Michael Hurley and Matthew Campbell filed a class action lawsuit against Facebook. The plaintiffs claim that Facebook “has systematically violated consumers’ privacy by reading its users’ personal, private Facebook messages without their consent.” The men also claim that Facebook scans its user’s  private messages for links that lead to URLs that have Facebook “Like” buttons. They believe that if Facebook finds a “Like” button, it then attributes a “Like” to that webpage. Furthermore, the men claim that Facebook illegally extracts information found in its user’s private messages and sells the information to advertisers. In 2011, the company generated $2.7 billion in targeted ad sales, according to the lawsuit. If the allegations are true Facebook would also be in violation of California’s Electronic Communications Privacy Act.

    The plaintiff are also demanding that Facebook, the world’s most used social media site, pay out $100 a day for each day of violation to members of the class action lawsuit.

    In its defense Facebook has denied the allegations. A spokesperson for the company said,”We believe the allegations are without merit and we will defend ourselves vigorously”.

    Graham Cluley, internet security expert, argues that Facebook is justified in scanning the private messages of its users as a security measure. According to Cluley, if Facebook did not scan user messages the site would be “rife” with phishing scams, malware and spam.

    This is not the first time Facebook has been hit with a class action lawsuit for privacy violation nor is it the only social media website to be accused. Last year, a similar lawsuit  was filed by 10 plaintiffs that said their Gmail messages were illegally being read by Google.

    Watch video for more insight

    http://youtu.be/wviVv540E4s

    Image via Facebook.com

  • Cory Booker Sworn In As US Senator

    Cory Booker Sworn In As US Senator

    Cory Booker has officially left his old job as mayor of Newar, NJ, and has become only the second African American to be elected to the Senate since Barack Obama. Booker has already gained a quite a celebrity status as the Newark Mayor, and he is viewed as a hero of the people.

    He was sworn in yesterday, after winning a special election in mid-October to fill the seat of Senator Frank Lautenberg, who died in June. Cory Booker has been called the “Rock Star Mayor” by Oprah Winfrey and on the day he was sworn into office, the new senator already had 1.4 million followers on twitter.

    Booker was sworn in by Vice President Joe Biden, as his friends and family members, including his mother, brother, and talk show host Gayle King, who is a close friend, looked on from the Senate gallery. He told reporters after the ceremony “This is a really special day for me, and I’m really blown away.”

    Senator Harry Reid also gave a welcoming statement to the new Senator Booker when saying “I urge my fellow senators, Democrats and Republicans, to get to know this good man. We are fortunate to have him here.”

    Cory Booker is 44-years-old, and grew up in suburban Harrington Park, NJ. He has said that New Jersey residents have told him to work on economic issues, including New Jersey’s high foreclosure and unemployment rates. He has been showered with advice on what to do as a Senator, and plans to take the best of it.

    The Newark Mayor rocketed to celebrity status dealing with celebrities, and bringing millions in philanthropic money into the city. For example, he persuaded Facebook founder Mark Zuckerberg to donate $100 million to Newark’s school system in 2010. As a result, Zuckerberg continued to help out by hosting a fundraiser for Booker’s campaign earlier this year.

    Booker also had quite an incredible story as mayor when he rescued a woman from a fire in 2012. Whether Cory Booker is looked at as a superhero or a rockstar, he has now become the Democratic Senator from his home state of New Jersey. He is already looked at with celebrity status at his first day on the job, and is being treated unlike other senators.

    Cory Booker is very humble and wants to help the people of New Jersey on the issues that truly matter. He is also one that understands how politics works and does not want to get caught up in it in the wrong way, asserting this fact by saying “Don’t let the Senate change you. Try to change the Senate.”

    Image via Youtube

  • Facebook Earnings Are Out, Revenue Up 66% At $2.02 Billion

    Facebook Earnings Are Out, Revenue Up 66% At $2.02 Billion

    Facebook just released its earnings report for the third quarter with revenues of $2.02 billion and earnings per share of 25 cents, beating Wall Street expectations. Revenue was up 66% year over year.

    Mobile ad revenue accounted for 49% of ad revenue. Payments and fees revenue totaled $218 million for the quarter.

    Daily active users are up 25% year over year at 728 million on average. Monthly actives are 1.19 billion, up 18% YoY, and mobile monthly actives are 874 million up 45%. Mobile daily actives are 507 million on average.

    CEO Mark Zuckerberg said, “For nearly ten years, Facebook has been on a mission to connect the world. The strong results we achieved this quarter show that we’re prepared for the next phase of our company, as we work to bring the next five billion people online and into the knowledge economy.”

    On the conference call, he noted the company’s new milestones – 49% of revenue coming from mobile and 48 percent of users only accessing Facebook from mobile. He said this is an “incredible sign of how Facebook has involved over the past year.”

    He then talked up Internet.org and trying to make access to Facebook cheaper in developing regions. He talked about the Onavo acquisition, saying it would play a major role in these initiatives.

    News Feed is the service Facebook invests in most, he said, also noting recent improvements to Graph Search. He’s really excited about the mobile version, which hasn’t been released yet. He also talked about continuing to improve Facebook Messenger, which just got an update on Android. They’re also working on voice interaction.

    People will start seeing more and more relevant Facebook ads, he said. They’re going to keep on investing in improving them.

    Here’s the release in its entirety:

    MENLO PARK, Calif., Oct. 30, 2013 /PRNewswire/ — Facebook, Inc. (NASDAQ: FB) today reported financial results for the third quarter, which ended September 30, 2013.

    “For nearly ten years, Facebook has been on a mission to connect the world,” said Mark Zuckerberg, Facebook founder and CEO. “The strong results we achieved this quarter show that we’re prepared for the next phase of our company, as we work to bring the next five billion people online and into the knowledge economy.”

    Third Quarter 2013 Financial Summary
    Three Months Ended
    September 30,    		 Nine Months Ended
    September 30,
    In millions, except percentages and per share amounts 2012 2013 2012 2013
    Revenue $ 1,262 $ 2,016 $ 3,504 $ 5,286
    Income from Operations
    GAAP $ 377 $ 736 $ 15 $ 1,672
    Non-GAAP $ 525 $ 987 $ 1,525 $ 2,345
    Operating Margin
    GAAP 30% 37% —% 32%
    Non-GAAP 42% 49% 44% 44%
    Net Income (Loss)
    GAAP $ (59) $ 425 $ (11) $ 977
    Non-GAAP $ 311 $ 621 $ 890 $ 1,421
    Diluted Earnings (Loss) per Share (EPS)
    GAAP $ (0.02) $ 0.17 $ (0.01) $ 0.39
    Non-GAAP $ 0.12 $ 0.25 $ 0.36 $ 0.57

    Third Quarter 2013 Operational Highlights

    • Daily active users (DAUs) were 728 million on average for September 2013, an increase of 25% year-over-year.
    • Monthly active users (MAUs) were 1.19 billion as of September 30, 2013, an increase of 18% year-over-year.
    • Mobile MAUs were 874 million as of September 30, 2013, an increase of 45% year-over-year. Mobile DAUs were 507 million on average for September 2013.

    Third Quarter 2013 Financial Highlights

    Revenue – Revenue for the third quarter of 2013 totaled $2.02 billion, an increase of 60%, compared with $1.26 billion in the third quarter of 2012.

    • Revenue from advertising was $1.80 billion, a 66% increase from the same quarter last year.
    • Mobile advertising revenue represented approximately 49% of advertising revenue for the third quarter of 2013.
    • Payments and other fees revenue was $218 million for the third quarter of 2013.

    Costs and expenses – GAAP costs and expenses for the third quarter of 2013 were $1.28 billion, an increase of 45% from the third quarter of 2012 driven primarily by infrastructure expense and increased headcount. Excluding share-based compensation and related payroll tax expenses, non-GAAP costs and expenses were $1.03 billion in the third quarter of 2013, up 40% compared to $737 millionfor the third quarter of 2012.

    Income from operations – For the third quarter of 2013, GAAP income from operations was $736 million, compared to GAAP income from operations of $377 million in the third quarter of 2012. Excluding share-based compensation and related payroll tax expenses, non-GAAP income from operations for the third quarter of 2013 was $987 million, up 88% compared to $525 million for the third quarter of 2012.

    Operating margin – GAAP operating margin was 37% for the third quarter of 2013, compared to 30% in the third quarter of 2012. Excluding share-based compensation and related payroll tax expenses, non-GAAP operating margin was 49% for the third quarter of 2013, compared to 42% for the third quarter of 2012.

    Provision for income taxes – GAAP income tax expense for the third quarter of 2013 was $301 million, representing a 41% effective tax rate. Excluding share-based compensation and related payroll tax expenses, the non-GAAP effective tax rate would have been approximately 36%.

    Net income (loss) and EPS – For the third quarter of 2013, GAAP net income was $425 million, compared to a net loss of $59 millionfor the third quarter of 2012. Excluding share-based compensation and related payroll tax expenses and income tax adjustments, non-GAAP net income for the third quarter of 2013 was $621 million, up 100% compared to $311 million for the third quarter of 2012. GAAP diluted EPS was $0.17 in the third quarter of 2013, compared to a loss per share of $0.02 in the third quarter of 2012. Excluding share-based compensation and related payroll tax expenses and income tax adjustments, non-GAAP diluted EPS for the third quarter of 2013 was $0.25, up 108% compared to $0.12 in the third quarter of 2012.

    Capital expenditures – Capital expenditures for the third quarter of 2013 were $284 million.

    Cash and marketable securities – Cash and marketable securities were $9.33 billion at the end of the third quarter of 2013.

    Webcast and Conference Call Information

    Facebook will host a conference call to discuss the results at 2 p.m. PT / 5 p.m. ET today. The live webcast can be accessed at the Facebook Investor Relations website at investor.fb.com, along with the company’s earnings press release, financial tables and slide presentation. Facebook uses the investor.fb.com website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

    Following the call, a replay will be available at the same website. A telephonic replay will be available for one week following the conference call at + 1 (404) 537-3406 or + 1 (855) 859-2056, conference ID 71787026.

    About Facebook

    Founded in 2004, Facebook’s mission is to give people the power to share and make the world more open and connected. People use Facebook to stay connected with friends and family, to discover what’s going on in the world, and to share and express what matters to them.

    Contacts

    Investors:
    Deborah Crawford
    [email protected] / investor.fb.com

    Press:
    Tucker Bounds
    [email protected] / newsroom.fb.com

    Forward Looking Statements

    This press release contains forward-looking statements regarding our future business expectations, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors including: our ability to retain or increase users and engagement levels; our reliance on advertising revenue; our ability to continue to monetize our mobile products; risks associated with new product development and their introduction as well as other new business initiatives; our emphasis on user growth and engagement over short-term financial results; competition; litigation; privacy and regulatory concerns; security breaches; and our ability to manage growth and geographically-dispersed operations. These and other potential risks and uncertainties that could cause actual results to differ from the results predicted are more fully detailed under the caption “Risk Factors” in our Quarterly Report on Form 10-Q filed with the SEC on July 25, 2013, which is available on our Investor Relations website at investor.fb.com and on the SEC website at www.sec.gov. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2013. In addition, please note that the date of this press release is October 30, 2013, and any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result of new information or future events.

    Non-GAAP Financial Measures

    To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: revenue excluding foreign exchange effect and advertising revenue excluding foreign exchange effect, non-GAAP costs and expenses, non-GAAP income from operations; non-GAAP net income; non-GAAP diluted shares; non-GAAP diluted earnings per share; non-GAAP operating margin; non-GAAP effective tax rate; and free cash flow. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In particular, many of the adjustments to our GAAP financial measures reflect the exclusion of items, specifically share-based compensation expense and payroll tax related to share-based compensation expense, and the related income tax effects, that are recurring and will be reflected in our financial results for the foreseeable future. In addition, these measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures.

    We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business.

    We exclude the following items from one or more of our non-GAAP financial measures:

    Share-based compensation expense. We exclude share-based compensation expense because we believe that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operational performance. In particular, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FASB ASC Topic 718, we believe that providing non-GAAP financial measures that exclude this expense allow investors the ability to make more meaningful comparisons between our operating results and those of other companies. Accordingly, we believe that excluding this expense provides investors and management with greater visibility to the underlying performance of our business operations, facilitates comparison of our results with other periods, and may also facilitate comparison with the results of other companies in our industry.

    Payroll tax expense related to share-based compensation. We exclude payroll tax expense related to share-based compensation expense because, without excluding these tax expenses, investors would not see the full effect that excluding share-based compensation expense had on our operating results. These expenses are tied to the exercise or vesting of underlying equity awards and the price of our common stock at the time of vesting or exercise, which factors may vary from period to period independent of the operating performance of our business. Similar to share-based compensation expense, we believe that excluding this payroll tax expense provides investors and management with greater visibility to the underlying performance of our business operations and facilitates comparison with other periods as well as the results of other companies.

    Income tax effect of share-based compensation and related payroll tax expenses. We believe excluding the income tax effect of non-GAAP adjustments assists investors and management in understanding the tax provision related to those adjustments and provides useful supplemental information regarding the underlying performance of our business operations.

    Assumed preferred stock conversion. As a result of our IPO in May 2012, all outstanding shares of preferred stock were automatically converted into shares of Class B common stock. Consequently, non-GAAP diluted shares and earnings per share for the nine months ended September 30, 2012 have been calculated assuming this conversion for periods prior to the IPO, which we believe facilitates comparison between periods.

    Dilutive equity awards excluded from GAAP. In our calculation of non-GAAP weighted average shares used to compute earnings per share attributable to Class A and Class B common stockholders for the three and nine months ended September 30, 2012, we give effect to antidilutive RSUs and stock options that are excluded from GAAP weighted average shares due to our reporting of a net loss. We also include the effect of unvested RSUs in periods prior to the IPO in such calculation for the nine months ended September 30, 2012, the number of which is substantial due to the terms of RSUs granted prior to 2011. We believe including these awards facilitates comparison between periods.

    Foreign exchange effect on revenue. We translate revenue for the three and nine months ended September 30, 2013 using prior year exchange rates, which we believe is a useful metric that facilitates comparison to our historical performance.

    Purchases of property and equipment; Property and equipment acquired under capital leases. We subtract both purchases of property and equipment and property and equipment acquired under capital leases in our calculation of free cash flow because we believe that these two items collectively represent the amount of property and equipment we need to procure to support our business, regardless of whether we finance such property or equipment with a capital lease. We believe that this methodology can provide useful supplemental information to help investors better understand underlying trends in our business.

    For more information on our non-GAAP financial measures and a reconciliation of such measures to the nearest GAAP measure, please see the “Reconciliation of Non-GAAP Results to Nearest GAAP Measures” table in this press release.

    FACEBOOK, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (In millions, except for per share amounts)
    (Unaudited)
    Three Months Ended
    September 30,    		 Nine Months Ended
    September 30,
    2012 2013 2012 2013
    Revenue $ 1,262 $ 2,016 $ 3,504 $ 5,286
    Costs and expenses:
    Cost of revenue 322 507 967 1,384
    Research and development 244 369 1,102 1,006
    Marketing and sales 168 233 703 704
    General and administrative 151 171 717 520
    Total costs and expenses 885 1,280 3,489 3,614
    Income from operations 377 736 15 1,672
    Interest and other income (expense), net:
    Interest expense (11) (21) (35) (50)
    Other income, net 6 11 9 2
    Income (loss) before provision for income taxes 372 726 (11) 1,624
    Provision for income taxes 431 301 — 647
    Net income (loss) $ (59) $ 425 $ (11) $ 977
    Less: Net income attributable to participating securities — 3 — 6
    Net income (loss) attributable to Class A and Class B common stockholders $ (59) $ 422 $ (11) $ 971
    Earnings (loss) per share attributable to Class A and Class B common stockholders:
    Basic $ (0.02) $ 0.17 $ (0.01) $ 0.40
    Diluted $ (0.02) $ 0.17 $ (0.01) $ 0.39
    Weighted average shares used to compute earnings (loss) per share attributable to Class A and Class B common stockholders:
    Basic 2,420 2,430 1,884 2,408
    Diluted 2,420 2,528 1,884 2,504
    Share-based compensation expense included in costs and expenses:
    Cost of revenue $ 8 $ 12 $ 79 $ 31
    Research and development 114 164 719 432
    Marketing and sales 28 34 279 91
    General and administrative 29 29 311 79
    Total share-based compensation expense $ 179 $ 239 $ 1,388 $ 633
    Payroll tax expenses related to share-based compensation included in costs and expenses:
    Cost of revenue $ (3) $ — $ 3 $ 1
    Research and development (12) 8 36 26
    Marketing and sales (9) 2 16 7
    General and administrative (7) 2 67 6
    Total payroll tax expenses related to share-based compensation $ (31) $ 12 $ 122 $ 40

    FACEBOOK, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In millions)
    (Unaudited)
    December 31,
    2012    		 September 30,
    2013
    Assets
    Current assets:
    Cash and cash equivalents $ 2,384 $ 3,100
    Marketable securities 7,242 6,228
    Accounts receivable 719 872
    Income tax refundable 451 7
    Prepaid expenses and other current assets 471 342
    Total current assets 11,267 10,549
    Property and equipment, net 2,391 2,685
    Goodwill and intangible assets, net 1,388 1,609
    Other assets 57 90
    Total assets $ 15,103 $ 14,933
    Liabilities and stockholders’ equity
    Current liabilities:
    Accounts payable $ 65 $ 36
    Platform partners payable 169 171
    Accrued expenses and other current liabilities 423 453
    Deferred revenue and deposits 30 36
    Current portion of capital lease obligations 365 288
    Total current liabilities 1,052 984
    Capital lease obligations, less current portion 491 287
    Long-term debt 1,500 —
    Other liabilities 305 614
    Total liabilities 3,348 1,885
    Stockholders’ equity
    Common stock and additional paid-in capital 10,094 10,399
    Accumulated other comprehensive income 2 13
    Retained earnings 1,659 2,636
    Total stockholders’ equity 11,755 13,048
    Total liabilities and stockholders’ equity $ 15,103 $ 14,933

    FACEBOOK, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In millions)
    (Unaudited)
    Three Months Ended September 30, Nine Months Ended September 30,
    2012 2013 2012 2013
    Cash flows from operating activities
    Net income (loss) $ (59) $ 425 $ (11) $ 977
    Adjustments to reconcile net income (loss) to net cash provided by operating activities:
    Depreciation and amortization 176 274 425 737
    Lease abandonment expense 4 43 7 108
    Loss on disposal or write-off of equipment 4 19 8 39
    Share-based compensation 179 239 1,388 633
    Deferred income taxes (60) 2 (434) 21
    Tax benefit from share-based award activity 473 129 854 277
    Excess tax benefit from share-based award activity (473) (130) (854) (285)
    Changes in assets and liabilities:
    Accounts receivable (50) (83) (90) (145)
    Income tax refundable — — (567) 444
    Prepaid expenses and other current assets 31 5 24 (11)
    Other assets 9 9 — (35)
    Accounts payable 28 (19) 20 (17)
    Platform partners payable (1) (1) (16) 2
    Accrued expenses and other current liabilities (31) (114) 155 (105)
    Deferred revenue and deposits — 4 (5) 6
    Other liabilities 20 148 27 345
    Net cash provided by operating activities 250 950 931 2,991
    Cash flows from investing activities
    Purchases of property and equipment (171) (284) (1,037) (879)
    Purchases of marketable securities (1,633) (904) (8,590) (4,364)
    Sales of marketable securities 443 1,158 571 2,433
    Maturities of marketable securities 1,307 780 2,413 2,954
    Investments in non-marketable equity securities — — (3) (1)
    Acquisitions of businesses, net of cash acquired, and purchases of intangible assets (336) (16) (911) (237)
    Change in restricted cash and deposits 1 — (2) 4
    Net cash (used in) provided by investing activities (389) 734 (7,559) (90)
    Cash flows from financing activities
    Net proceeds from issuance of common stock (1) — 6,760 —
    Taxes paid related to net share settlement of equity awards — (148) — (706)
    Proceeds from exercise of stock options — 10 9 20
    Repayment of long-term debt — (1,500) — (1,500)
    Proceeds from sale and lease-back transactions 123 — 205 —
    Principal payments on capital lease obligations (88) (91) (231) (291)
    Excess tax benefit from share-based award activity 473 130 854 285
    Net cash (used in) provided by financing activities 507 (1,599) 7,597 (2,192)
    Effect of exchange rate changes on cash and cash equivalents 12 14 (3) 7
    Net increase in cash and cash equivalents 380 99 966 716
    Cash and cash equivalents at beginning of period 2,098 3,001 1,512 2,384
    Cash and cash equivalents at end of period $ 2,478 $ 3,100 $ 2,478 $ 3,100
    Supplemental cash flow data
    Cash paid during the period for:
    Interest $ 11 $ 7 $ 30 $ 33
    Income taxes $ 2 $ 43 $ 184 $ 61
    Cash received during the period for:
    Income taxes $ — $ — $ — $ 419
    Non-cash investing and financing activities:
    Net change in accounts payable and accrued expenses and other current liabilities related to property and equipment additions $ (21) $ 36 $ (80) $ 31
    Property and equipment acquired under capital leases $ 161 $ — $ 251 $ 11
    Fair value of shares issued related to acquisitions of businesses and other assets $ 250 $ — $ 275 $ 77

    Reconciliation of Non-GAAP Results to Nearest GAAP Measures
    (In millions, except percentages and per share amounts)
    (Unaudited)
    Three Months Ended
    September 30,    		 Nine Months Ended
    September 30,
    2012 2013 2012 2013
    GAAP revenue $ 1,262 $ 2,016 $ 3,504 $ 5,286
    Foreign exchange effect on 2013 revenue using 2012 rates 2 20
    Revenue excluding foreign exchange effect $ 2,018 $ 5,306
    GAAP revenue year-over-year change % 60% 51%
    Revenue excluding foreign exchange effect year-over-year change % 60% 51%
    GAAP advertising revenue $ 1,086 $ 1,798 $ 2,950 $ 4,641
    Foreign exchange effect on 2013 advertising revenue using 2012 rates 3 20
    Advertising revenue excluding foreign exchange effect $ 1,801 $ 4,661
    GAAP advertising revenue year-over-year change % 66% 57%
    Advertising revenue excluding foreign exchange effect year-over-year change % 66% 58%
    GAAP costs and expenses $ 885 $ 1,280 $ 3,489 $ 3,614
    Share-based compensation expense (179) (239) (1,388) (633)
    Payroll tax expenses related to share-based compensation 31 (12) (122) (40)
    Non-GAAP costs and expenses $ 737 $ 1,029 $ 1,979 $ 2,941
    GAAP income from operations $ 377 $ 736 $ 15 $ 1,672
    Share-based compensation expense 179 239 1,388 633
    Payroll tax expenses related to share-based compensation (31) 12 122 40
    Non-GAAP income from operations $ 525 $ 987 $ 1,525 $ 2,345
    GAAP net income (loss) $ (59) $ 425 $ (11) $ 977
    Share-based compensation expense 179 239 1,388 633
    Payroll tax expenses related to share-based compensation (31) 12 122 40
    Income tax adjustments 222 (55) (609) (229)
    Non-GAAP net income $ 311 $ 621 $ 890 $ 1,421
    GAAP diluted shares 2,420 2,528 1,884 2,504
    Assumed preferred stock conversion1 — — 272 —
    Dilutive securities excluded due to net loss 159 — 170 —
    Dilutive equity awards excluded from GAAP1 — — 118 —
    Non-GAAP diluted shares 2,579 2,528 2,444 2,504
    GAAP diluted earnings (loss) per share (0.02) 0.17 (0.01) 0.39
    Net income attributable to participating securities — — — —
    Non-GAAP adjustments to net (loss) income 0.15 0.08 0.48 0.18
    Non-GAAP adjustments to diluted shares (0.01) — (0.11) —
    Non-GAAP diluted earnings per share 0.12 0.25 0.36 0.57
    GAAP operating margin 30% 37% —% 32%
    Share-based compensation expense 14% 12% 40% 12%
    Payroll tax expenses related to share-based compensation (2)% 1% 3% 1%
    Non-GAAP operating margin 42% 49% 44% 44%
    GAAP income (loss) before provision for income taxes $ 372 $ 726 $ (11) $ 1,624
    GAAP provision for income taxes 431 301 — 647
    GAAP effective tax rate 116% 41% —% 40%
    GAAP income (loss) before provision for income taxes $ 372 $ 726 $ (11) $ 1,624
    Share-based compensation and related payroll tax expenses 148 251 1,510 673
    Non-GAAP income before provision for income taxes $ 520 $ 977 $ 1,499 $ 2,297
    Non-GAAP provision for income taxes 209 356 609 876
    Non-GAAP effective tax rate 40% 36% 41% 38%
    Net cash provided by operating activities $ 250 $ 950 $ 931 $ 2,991
    Purchases of property and equipment (171) (284) (1,037) (879)
    Property and equipment acquired under capital leases (161) — (251) (11)
    Free cash flow $ (82) $ 666 $ (357) $ 2,101
    1Gives effect to assumed preferred stock conversion and other dilutive equity awards prior to our IPO for comparability

    SOURCE Facebook

  • The Zuckerberg Files: Archiving Every Single Thing Mark Zuckerberg Has Ever Said

    The Zuckerberg Files: Archiving Every Single Thing Mark Zuckerberg Has Ever Said

    Mark Zuckerberg has made a lot of money convincing people that they should contribute to a public, permanent record of everything they’ve ever said or done. Now, in a project that can only be described as the most poetic of justice, everything that Mark Zuckerberg has ever said is going to be available, for scrutiny, in one location.

    A new digital archive called The Zuckerberg Files is attempting to be “a digital archive of all public utterances of Facebook’s founder and CEO, Mark Zuckerberg.” As of right now, the archive contains over 100 full-text transcripts and 50 video clips from a variety of sources, including “blog posts, letters to shareholders, media interviews, public appearances and product presentations, and quotes in other sources.”

    Why do we need The Zuckerberg Files? It’s all about forming a better dialogue about privacy and better understanding the Facebook CEO, apparently:

    “The dominance of social networking sites, such as Facebook, in contemporary life sparks unique issues of information privacy and the ethics of sharing online. By gaining a better understanding of how Facebook’s founder and CEO conceives of his own company’s role in the policy and ethical debates surrounding social networking, we will be better suited to critically engage in a dialogue on privacy and Facebook, inform design and policy recommendations, and increase user awareness and literacy,” says the project’s administrator, University of Wisconsin-Madison School of Information Studies’ Michael Zimmer, PhD.

    Although the rationale given for why a database like The Zuckerberg Files even needs to exists doesn’t take any shots at Zuckerberg for destroying everyone else’s privacy or anything, The Verge points out that the project’s creator once co-authored a stinging op-ed that criticized the company for the way they handle users’ private information.

    “Facebook follows the pattern of taking two steps forward with an aggressive misuse of personal information and creeping back the slightest bit once the criticisms emerged. Each time, Facebook promised users that ‘we will keep listening,’ and artfully reminding us that all they really want to do is make ‘the world more open and connected,’” he wrote back in 2010 on The Huffington Post.

    Sure it’s about research – but something about it just feels like it has a hint of comeuppance attached. For one of the most powerful tech figures on the planet – one that has made billions out of the idea that users are in fact, the product – there needs to be a place where everything he’s ever said can be combed through and scrutinized. Why not? To borrow a sentiment usually reserved for people who post dumb stuff on Facebook, “well, if you didn’t want people to see it, then you shouldn’t have made it public.”

    Not that Mark Zuckerberg is known for major public gaffes or anything, but it’s interesting that a guy who’s done more than anyone in recent memory to tear down privacy walls now has an entire archive devoted to the idea that nothing he has ever said will be able to fall through the cracks.

    One final note – you’re probably not going to be able to access The Zuckerberg Files.

    “The Zuckerberg Files is an open-access public archive. All bibliographic and metadata are openly available. In adherence with the “Code of Best Practices in Fair Use for Scholarly Research in Communication”, access to the full-text transcripts and archived video files is limited to scholars doing research in a relevant area.”

    Yeah, you have to request access. Bummer, right?

    Images via Josh Wolford, The Zuckerberg Files

  • Cory Booker Wins Race to Become Senator

    Cory Booker Wins Race to Become Senator

    He did it! Cory Booker has succeeded in defeating Republican, Steve Lonegan, in becoming the senator-elect of the state of New Jersey for the Democratic party. Booker, 44, reportedly won with over 55 percent of the vote. The Associated Press was the first to name Booker the victor with the overwhelming majority of votes.

    This day marks a historic feat for Booker, because as ABC news stated, “Booker is not only the first African-American U.S. senator from New Jersey, he is the first African-American to be nominated by a major party for a statewide office in New Jersey.”

    Booker, who has become a sort of celebrity, served for 7 years as the mayor of Newark. In this position, he gained a lot of praise and speculation. Controversy took center stage when Mark Zuckerberg made a pledge to the Newark mayor to donate $100 million dollars (from Zuckerberg’s personal fortune) to the Newark School District. Booker has also been the target of ongoing questioning regarding his “single” status and possible homosexuality.

    Booker who is fairly outspoken and has been appreciated for his ability to be frank and honest, shared with the Washington Post, ““…People who think I’m gay, some part of me thinks it’s wonderful. Because I want to challenge people on their homophobia. I love seeing on Twitter when someone says I’m gay, and I say, ‘So what does it matter if I am? So be it. I hope you are not voting for me because you are making the presumption that I’m straight.’ ”

    Booker could easily be dubbed a champion for the people due to the amount of support he’s received. Booker has rounded up over $11 million in campaign funds, makes regular visits to television networks and daytime talk shows and has the support of Hollywood heavyweights, such as Oprah Winfrey and Steven Spielberg.

    Socially and arguably more importantly, it’s no secret that Booker is extremely active on social media with over 1.4 million Twitter followers. Booker is also following more than 75,000 people on the social networking site. His popularity among the general public reaches well beyond the Garden State and may have contributed largely to his victory today. It was reported that many of the donations towards his campaign as senator came from several out-of-state patrons.

    One of Booker’s biggest supporters was President Obama who released a video message showing his support and urging voters to elect the Democratic candidate. His relationship with the president links back to when President Obama offered Booker a leadership position in the White House Office of Urban Affairs. Booker turned the position down citing his commitment to Newark, New Jersey.

    Image credit: Twitter.com.

  • Mark Zuckerberg Buys 4 New Homes For More Privacy

    Mark Zuckerberg Buys 4 New Homes For More Privacy

    Mark Zuckerberg is worried about privacy, and as a result he decided to buy four houses that were owned by neighbors of his. He bought four houses near his home in Palo Alto, California that were not even on the market, offering absurdly high prices to the homeowners. It seems that Zuckerberg, the CEO of Facebook, that guy we all got to know through his story in The Social Network, is now able to do anything. Let’s face it, if Mark Zuckerberg asked to buy your house, would it really possible to turn him down? The guy who started a website to rate girls based on if they are hot or not, and eventually became the founder of Facebook, is now one of the most successful people in the industry of business.

    Even though the houses were not on the market, Zuckerberg found a way around that, buying one home for $14 million, when the median value in his Crescent Park neighborhood is only about $3 million. He paid $30 million in total for all four houses, located next door and behind his current home. Zuckerberg, the multimillionaire at age 29, acted on impulse after learning that a developer was planning to buy one of the properties next door to him. A source said “The developer was going to build a huge house and market the property as being next door to Mark Zuckerberg.” He certainly did not want to have people coming over and making a spectacle of him, and decided to take action, and avoid the situation.

    The Facebook founder wants to be able to control how the properties around his home are marketed and who they are sold to. He will be leasing the homes back to the homeowners, since he has no problem with who was currently living there, and just wanted to avoid a possibly difficult future situation. He started buying the homes in December of 2012 after learning of the developer’s plans. Zuckerberg is currently worth $19 billion, as of September, according to Forbes. He attended Harvard, but dropped out, and subsequently became one of the most successful entrepreneurs of the internet generation.

    Zuckerberg is married to Priscilla Chan, and the couple also own a house in the Dolores Heights district of San Francisco. Their San Francisco home was bought this year for about $10 million, and is located about three miles from Facebook’s headquarters. They were married in the backyard in May of 2012. The all-star of internet business also made a statement recently, issuing his plan to make the internet more affordable.

    Image via Wikimedia Commons

  • Mark Zuckerberg Just Wants a Little Privacy, Buys Up Adjacent Real Estate

    Mark Zuckerberg Just Wants a Little Privacy, Buys Up Adjacent Real Estate

    The CEO of Facebook just wants a little privacy. I know, the joke writes itself.

    Mark Zuckerberg has made a slightly unusual purchase, four of them to be exact. Mercury News reports that Zuck has just spent more than $30 million snatching up four houses adjacent to his own Palo Alto property – paying more the $14 million for one of them. A local real estate agent called this price “absurdly high.”

    So, why would Zuck buy up all the houses around his own property? Is he looking to make Zuck-land, is he trying to build a giant complex?

    Apparently not. From Mercury News:

    Zuckerberg paid top dollar — more than $30 million in total — for the four residential properties located next door and behind his own home. But he has no plans to build a Taj Mahal on the land, according to a person with knowledge of the transactions, who said Zuckerberg is leasing the existing homes back to the families that live there.

    The 29-year-old multibillionaire acted after he learned of a developer’s plan to buy one of the properties next door to the Facebook co-founder, said the source. “The developer was going to build a huge house and market the property as being next door to Mark Zuckerberg.”

    When you think about it, it’s a smart move. It prevents people that would want to move in next to Zuck for the sole purpose of living next to Zuck from annoying him. Don’t act like you wouldn’t consider it if you had the money.

    Image via Facebook