Vujade facebook series_#1
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The document presents vujàdé's analysis of Facebook's business model and growth leading up to its IPO, comparing its financials to Apple and Google. It highlights Facebook's rapid revenue growth and discusses market expectations for the company's future performance, emphasizing the importance of employee talent in scaling its advertising business. The overall conclusion suggests that Facebook must expand its workforce significantly to meet market revenue and profit expectations.
Vujade facebook series_#1
- 1. VUJÀDÉ’S FACEBOOK SERIES Startup insights from a truly exciting case! #1 BUSINESS MODEL CANVAS Photo by: Vujàdé Ltd. – Jasper Bouwsma What does the market expect from facebook when valued at USD100B? Based on a benchmark with Apple and Google.! Vujàdé Ltd. – Supporting Forward Thinking www.vujade.com Slide |
- 2. Dear viewer! Vujàdé Ltd. is strongly involved in supporting startups. As a consequence we have been following the incredible development of facebook in terms of number of users and according valuations. On February 2nd 2012 facebook filed its Form S-1 for its long anticipated IPO at the US Securities and Exchange Commission. The SEC documentation provides us with better insights in facebook and provides some facts after a long period of rumors and interpretations of the insane growth of an 8-year company valued at a USD100B. With a series of presentations Vujàdé Ltd will look into a number of different startup related topics to explain and illustrate the exciting world of startups and growth companies. In this presentation we will compare facebook’s business model, financials and valuation with the market cap and financials of Apple (“a molecule-based business”) and Google (another “bits and bytes company”). The question being: What does the market expect from facebook when valued at USD100B? Happy sharing! Jasper Bouwsma Founder Vujàdé Ltd. Vujàdé Ltd. – Supporting Forward Thinking Slide | 2
- 3. FOR THIS PRESENTATION VUJÀDÉ LTD. HAS USED THE BELOW LISTED FORMS FILED TO THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION. EACH FORM FORM PROVIDES INSIGHTS IN THE 2011 REVENUES. Vujàdé Ltd. – Supporting Forward Thinking Slide | 3
- 4. THE BASIC FINANCIALS Revenues 2011 108’249 3’711 37’950 (US$ Milion) +% 2010 +66% +88% +29% Earnings 25’922 1’000 11’632 Gross Margin 23.9% 26.9% 30.7% THE CONSEQUENTIAL DRY FACTS: 1. APPLE, FACEBOOK AND GOOGLE ARE ALL HIGHLY PROFITABLE. 2. FACEBOOK HAS THE STRONGEST YEAR OVER YEAR GROWTH, CLOSELY FOLLOWED BY APPLE 3. FACEBOOK REVENUE MULTIPLES: 1. APPLE = 29X FACEBOOK REVENUE 2. Vujàdé Ltd. – Supporting Forward Thinking GOOGLE = 10X FACEBOOK REVENUE Slide | 4
- 5. SOME MORE FACTS & FIGURES Market Cap / US$507’8B US$102.6B US$201,9B Valuation Incorporation April 1st 1976 February 4th 2004 September 4th 1998 Date of IPO December 12th 1982 May 1st 2012 August 19th 2004 Time 2446 Days 3009 Days 2210 Days Incorporation - IPO (6Y and 8 M) (8Y and 3M) (6 Years) Revenue @ IPO 583M 3’711M 3’189M Earnings @ IPO 61M 1’000M 640M Market Cap post IPO US$1.8B US$100B! US$23B VUJÀDÉ’S INTERPRETATION: IF IS ABOUT TIME THAT FACEBOOK DOES ITS IPO 1. IN TERMS OF TIME SINCE INCORPORATION 2. IN TERMS IF PROFITABILITY Vujàdé Ltd. – Supporting Forward Thinking Slide | 5
- 6. SOME SIMPLE RATIOS Price to Sales 3x (4.7x) 27x! 7x (5.5x) Price to Earnings (19.7x) 100x! (17.3x) VUJÀDÉ’S INTERPRETATION: IF THE MARKET THINKS THAT FACEBOOK IS WORTH A 27X REVENUE, IT MUST BE BASED ON FUTURE REVENUE AND PROFIT EXPECTATIONS. SO LETS LOOK AT FACEBOOK’S BUSINESS MODEL Vujàdé Ltd. – Supporting Forward Thinking Slide | 6
- 7. FACEBOOK BUSINESS MODEL CANVAS Vujàdé Ltd. – Supporting Forward Thinking Slide | 7
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- 10. STATEMENT #2! fb makes as much advertising revenue as Google at their IPO.! QUESTION STATEMENT #1! To what extent is fb able 12% of total revenues and to establish and scale 80% of payment revenues their advertising business? ! come from Zynga.! QUESTION Is that part of the business model indeed STATEMENT #3! scalable?! fb is still young.! QUESTION What does fb have up their sleeve and what is it able to do with the cash generated from the IPO?! Vujàdé Ltd. – Supporting Forward Thinking Slide | 10
- 11. STATEMENT #4! currently, 3500 employees each generate appr. ! US$1.0M revenue.! QUESTION A) How can that ratio be improved! B) How to attract > talent?! Vujàdé Ltd. – Supporting Forward Thinking Slide | 11
- 12. CONCLUSION IN THE END IT IS ALL ABOUT ATTRACTING TALENT WHO WILL BE ABLE TO SCALE FACEBOOK’S ADVERTISING BUSINESS AND USE THE FACEBOOK’S KEY RESOURCE (I.E. 845M USERS, FACEBOOK.COM) TO LAUNCH NEW PRODUCTS AND EXTENT THE BUSINESS MODEL. #employees 3’500 32’500 Revenue/Employee 1’060’286 1’167’493 VUJÀDÉ’S INTERPRETATION: FOR FACEBOOK IT WILL ALL BE ABOUT HIRING THOUSANDS UPON THOUSANDS OF EMPLOYEES TO GENERATE THE REVENUE AND PROFIT THE MARKET SEEMS TO EXPECT. Just imagine hiring 60’000 people in a couple of years… ! Vujàdé Ltd. – Supporting Forward Thinking Slide | 12
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- 14. Vujàdé’s facebook series Billionaires vs. Millionaires #2 See Slide our Sha re ! www .slid Stay Tuned! And esha re.ne t/vu Enjo jade! y ! :)! Vujàdé Ltd. – Supporting Forward Thinking www.vujade.com Slide | 14
- 15. Vujàdé Ltd. Postal Address P.O. Box 4 CH-3257 Grossaffolterm Visiting Address Photo by: Vujàdé Ltd – Jasper Bouwsma Elfenaustrasse 3 CH-2502 Biel/Bienne +41 (0)31 32 32 300 Online www.vujade.com contact@vujade.com VujadeLtd Vujàdé Ltd. – Supporting Forward Thinking Slide |
- 16. Vu-jà-dé Photo: Vujàdé Ltd. – Supporting Forward Thinking Vujàdé is the opposite of déjà-vu and refers to something that has not yet taken place or has not yet existed. Looking for new solutions. Critically questioning existing structures and behavior. Looking at something from a different or an unusual point of view. In other words: Vujàdé stands for innovation. Photo by: VujàdéLtd. – – Jasper Bouwsma Vujàdé Ltd Supporting Forward Thinking Slide | 16