Vujade facebook series_#1

Vujàdé Ltd. – Supporting Forward Thinking Slide | Slide | Phot

o by

: Vuj

àdé

Ltd.

– J

aspe

r Bou

wsm

a

www.vujade.com

#1

VUJÀDÉ’S FACEBOOK SERIES Startup insights from a truly exciting case!

BUSINESS MODEL CANVAS What does the market expect from facebook when valued at USD100B? Based on a benchmark with Apple and Google.!

Vujàdé Ltd. – Supporting Forward Thinking Slide | Slide |

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.

2

Vujàdé Ltd. – Supporting Forward Thinking Slide | Slide | 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.


Revenues 2011 (US$ Milion) 108’249 3’711 37’950

+% 2010 +66% +88% +29%

Earnings 25’922 1’000 11’632

Gross Margin 23.9% 26.9% 30.7%

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.  GOOGLE = 10X FACEBOOK REVENUE

THE BASIC FINANCIALS

THE CONSEQUENTIAL DRY FACTS:


Market Cap / Valuation US$507’8B US$102.6B US$201,9B

Incorporation April 1st 1976 February 4th 2004 September 4th 1998

Date of IPO December 12th 1982 May 1st 2012 August 19th 2004

Time Incorporation - IPO

2446 Days (6Y and 8 M)

3009 Days (8Y and 3M)

2210 Days (6 Years)

Revenue @ IPO Earnings @ IPO

583M 61M

3’711M 1’000M

3’189M 640M

Market Cap post IPO US$1.8B US$100B! US$23B

SOME MORE FACTS & FIGURES

VUJÀDÉ’S INTERPRETATION: IF IS ABOUT TIME THAT FACEBOOK DOES ITS IPO 1.  IN TERMS OF TIME SINCE INCORPORATION 2.  IN TERMS IF PROFITABILITY


Price to Sales 3x (4.7x) 27x! 7x (5.5x)

Price to Earnings (19.7x) 100x! (17.3x)

SOME SIMPLE RATIOS

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


FACEBOOK BUSINESS MODEL

CANVAS




STATEMENT #1!12% of total revenues and 80% of payment revenues come from Zynga.!QUESTION Is that part of the business model indeed scalable?!

STATEMENT #2!fb makes as much advertising revenue as Google at their IPO.!QUESTION To what extent is fb able to establish and scale their advertising business? !

STATEMENT #3!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?!


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?!


#employees 3’500 32’500

Revenue/Employee 1’060’286 1’167’493

12

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.

CONCLUSION

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 | Slide | Vujàdé Ltd. – Supporting Forward Thinking

13


Vujàdé’s facebook series

Billionaires vs. Millionaires

www.vujade.com

#2 See our SlideShare !www.slideshare.net/vujade!And Enjoy !:)!

Stay Tuned!


Vujàdé Ltd. Postal Address

P.O. Box 4

CH-3257 Grossaffolterm

Visiting Address

Elfenaustrasse 3

CH-2502 Biel/Bienne

+41 (0)31 32 32 300

Online

www.vujade.com

[email protected]

VujadeLtd Phot

o by

: Vuj

àdé

Ltd

– Ja

sper

Bou

wsm

a


Vu-jà-dé

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.

Phot

o: V

ujàd

é Lt

d. –

Sup

port

ing

Forw

ard

Thin

king

Photo by: Vujàdé Ltd – Jasper Bouwsma

Business

Vujade facebook series_#1