NEW YORK, July 20, 2011 /PR Newswire/-- Privately-held Facebook, Inc. (PrivCo Private Ticker: FACEP) faces flattening user activity, new competitive threat from Google+, and IPO delay, according to new in-depth financial report released today by PrivCo.com, the leading private company financial data provider.
PrivCo's newly released Private Company Financial Report on Facebook, Inc. reveals the following conclusions:
- Repeat U.S. visits have flattened and are in decline
- Facebook, Inc. already feeling negative impact from new competition from Google+
- Facebook revenues have grown to $1.92 billion for the first half of 2011, up more than 100% versus the first half of 2010. However, financials for 2012 and beyond are at risk due to declining repeat visits, Google competition, and "Facebook fatigue"
- Zynga's 7/18 IPO filing amendment identifies significant tethering with Facebook and subsequently limited diversification of risk for Zynga, a major revenue source for Facebook
- Facebook making unpublicized attempts to increase revenue and traffic in the face of declining user activity: adding third ad-spot/page, up from two, blasting users new "weekly friends' birthday reminders"
PrivCo's report shows that although Facebook has more than 750 million registered users, repeat visits in its core U.S. market has peaked and is falling. PrivCo.com research finds Facebook's U.S. monthly unique visitors have been effectively flat since December of 2010, remaining at approximately 145 million, the result of declining repeat visits. After setting up profiles and uploading photos, revisits from Facebook's earliest users have declined; evidencing what PrivCo dubs "Facebook fatigue".
GOOGLE+ VIABLE COMPETITION:
After three weeks, Google+ is already attracting valuable market share. Google's Facebook rival has crossed the 20 million users mark, growing virally. PrivCo believes that Google launched its social media product just in time for 2012 ad-budget planning season, forcing businesses to set aside portions of 2012 social-media budgets for Google+ at Facebook's expense. And Google, (uncovered as a Zynga shareholder in this week's Zynga IPO filing amendment), has plans on Google+ for social gaming - one of Facebook's largest profit sources.
FACEBOOK PRIVATE STOCK SALES LIKELY FROZEN UNTIL VISIBILITY IMPROVES:
PrivCo concludes that plans for a Facebook IPO may be delayed until 2013, providing that visibility improves.
"Facebook is now facing meaningful competition from a well-funded and viable alternative, Google+. Facebook's last private stock valuation of $80 billion+ may no longer be justified on a risk-adjusted basis," says Joseph Ranzenbach, VP Operations at PrivCo. "Given that private companies rarely approve private-stock transactions at a decline in value, a virtual freeze on Facebook's private stock sales for the next two quarters of 2011 is possible."
POTENTIAL RISKS WITH ZYNGA:
On July 18, 2011, Zynga filed an amendment to its S-1 IPO filing with the Securities and Exchanges Commission. The updated filing included the developer addendum agreement between Facebook and Zynga, which indicated how significant a reliance Zynga has on Facebook for traffic, advertising, and strategy.
According to Dmitriy Goman, PrivCo's VP Research, "Facebook's flattening usage is also confirmed in the recent IPO filing by Zynga, which has tied its fate to Facebook by depending on it as a nearly exclusive distribution channel. According to Zynga's IPO filing, Zynga's number of active users actually fell between March 2010 and March 2011, from 67 million to 62 million, down 7.5% year over year. Since virtually all Zynga usage is on Facebook, this confirms PrivCo's conclusions that Facebook usage has peaked in the near term."
To access PrivCo's new Private Company Financial Report on Facebook, Inc. see: http://www.privco.com/asset-download/privco-sample-report.pdf
PrivCo Media, LLC (www.privco.com) is the premier source for business and financial data on major privately held companies. PrivCo publishes exclusive financial data on over 209,353 private companies, as well as details on over 79,493 private company deals, including private company M&A deals and multiples, venture capital investments, private equity buyouts, pre-IPO activity, restructuring, and more.