Facebook today once again updated its filing for an initial public offering (IPO) with the U.S. Securities and Exchange Commission (SEC). This is the sixth time it has done so, and the biggest change is that Facebook is once again emphasizing that monetizing mobile won't be easy.
Facebook is experiencing a shift of its user base from the Web to mobile, but this means fewer ads per -user. While Facebook announced mobile ads three months ago and even has Sponsored Stories in the mobile version of the News Feed (such as Offers), it doesn't yet have any numbers to show off.
Since Facebook essentially makes no money in mobile right now, and hasn't yet been able to prove it can do so, mobile is a threat that could hurt revenue in the long term. More specifically, the IPO document now warns that the number of daily active users (DAUs) is rising faster than the number of ads the site is showing, which means lower average revenue per user.
Menlo Park added these two snippets to the document: "we believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users (DAUs) increasing more rapidly than the increase in the number of ads delivered" and "we believe that the recent trend of our DAUs increasing more rapidly than the increase in the number of ads delivered has been due in part to certain pages having fewer ads per page as a result of these kinds of product decisions."
The company went even further when talking about how this could be a problem. Here's the relevant excerpt:
Based upon our experience in the second quarter of 2012 to date, the trend we saw in the first quarter of DAUs increasing more rapidly than the increase in number of ads delivered has continued. We believe this trend is driven in part by increased usage of Facebook on mobile devices where we have only recently begun showing an immaterial number of sponsored stories in News Feed, and in part due to certain pages having fewer ads per page as a result of product decisions. For additional information on factors that may affect these matters, see "Risk Factors—Growth in use of Facebook through our mobile products, where our ability to monetize is unproven, as a substitute for use on personal computers may negatively affect our revenue and financial results" and "Risk Factors—Our culture emphasizes rapid innovation and prioritizes user engagement over short-term financial results."
This is the smallest amendment yet. Aside from minor tweaks, the above is all that has been changed between version 5 and 6 for Facebook's IPO document.
Last but not least, here is the relevant document filed today with the SEC you may want to check out for more information: Amendment No. 6 to Form S-1 REGISTRATION STATEMENT.
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