* Facebook: $355 mln profit first 9 months of 2010-report
* Company had revenue of $1.2 billion in first 9 months
(Adds analyst comment, Facebook comment, adds bylines and SAN
By Matthew Goldstein and Alexei Oreskovic
NEW YORK/SAN FRANCISCO, Jan 6 Facebook earned
$355 million in net income in the first nine months of 2010,
according to documents distributed by Goldman Sachs (GS.N), a
fraction of the online social network's $50 billion valuation.
According to the document, Facebook generated $1.2 billion
in revenue in the first nine months of 2010.
That valuation is high, but not outrageous based on the
glimpse into the company's financial performance and the growth
that it implies, said Ryan Jacob, of the Jacob Internet Fund.
"It just shows you that these business can generate 30
percent to 40 percent, potentially, operating margins," he
"They probably did at least $500 million in net income in
2010," Jacob said.
Goldman began hand-delivering copies of the 101-page
private placement memorandum for a $1.5 billion Facebook
offering to its wealthy customers a little after lunchtime in
New York, according to a person who received a copy.
The Goldman customer said he received a separate six-page
financial statement containing information on the social
The document provides some of the most detailed financial
information yet about Facebook, which Goldman recently valued
at $50 billion in a separate, $450 million funding.
"This year you could make the case that they're probably
going to be north of $800 million and probably close to a
billion," Jacob said.
A Facebook representative declined to comment on the
The financial statements were not audited and offered
little detail about how Facebook generates it revenue, said the
source, who did not want to be identified because he had signed
a non-disclosure agreement.
Facebook, which was founded in a Harvard dorm room in 2004,
has more than 500 million users and is challenging big Web
businesses like Google Inc (GOOG.O) and Yahoo Inc (YHOO.O)
for users' time online and for advertising dollars.
Goldman customers seeking to buy shares in the privately
held Facebook will invest money in a newly formed Delaware
entity called FBDC Investors LP, according to the source.
Corporate records show that FBDC Investors was incorporated in
Delaware on Jan. 5.
Goldman customers have until Friday to commit to investing
in the new entity and until next Tuesday to wire money to the
Wall Street firm.
Goldman, which is investing $450 million of its own capital
in Facebook, is raising at least $1.5 billion from its wealthy
customers through the limited-time offering.
Investors are increasingly eager to buy shares of Facebook
and other fast-growing Internet social networking companies on
(Additional reporting by Joseph Giannone in New York. Editing
by Robert MacMillan)