Facebook earned $355 million in net income during the first nine months of 2010, over which time the social network generated $1.2 billion in revenue, according to documents distributed by Goldman Sachs (NYSE:GS), which recently estimated Facebook’s value to be around $50 billion.
“It just shows you that these business can generate 30 percent to 40 percent, potentially, operating margins,” said Ryan Jacob, of the Jacob Internet Fund. “They probably did at least $500 million in net income in 2010.” Jacob expects the company to increase its net income in 2011 to between $800 million and $1 billion.
Today, Goldman (NYSE:GS) began hand-delivering copies of a 101-page private placement memorandum for a $1.5 billion Facebook offering to its wealthy customers, accompanied by a six-page financial statement. Until now, though analysts have been able to estimate Facebook’s worth, the exact figures have been unavailable, as it remains a privately-held company. However, the financial statements offered little insight into how Facebook generates its revenue.
Goldman (NYSE:GS) customers looking to buy shares in the social network will invest money in a newly-formed entity called FBDC Investors LP, which was incorporated in Delaware on January 5. Those select customers presented with the opportunity will have until Friday to commit and until Tuesday to wire the money to Goldman.