Screen shot from Facebook's 188-page Securities Exchange Commission IPO filing.
Reading through Facebook's IPO filing is like an episode of "This Is Your Life." This is where you and your artist's fans spend a good chunk of your lives. This is how you will advertise on the Web. This is where people share their interests in music, videos and games. We already knew the role Facebook plays in our everyday lives. But now there are usage numbers, financial information and details of growth strategy.
Anyone looking for clues about Facebook's role in the music business will be disappointed. The 188-page document, filed with the SEC Wednesday afternoon, contains the word "music" 11 times - usually in context of content that can be shared on the platform - and only once mentions Spotify, the subscription music service with which Facebook has created a close partnership.
But the filing contains plenty of indirect evidence that Facebook will increasingly play a vital role in music and other entertainment industries. We find out, for example, the service's average daily users in December 2011 stood at 483 million worldwide and 126 million in the US and Canada. Monthly average users that month were 845 million worldwide (425 million of them via mobile) and 179 million in the US and Canada. Europe is Facebook's biggest territory with 229 million monthly active users and 143 million daily active users.
We find out that Facebook is a revenue powerhouse even though it doesn't yet monetize mobile traffic. The company's revenue grew 88 percent to $3.7 billion in 2011. Nearly $3.2 billion of that came from advertising.
And we see that Facebook is already a large online marketplace and will become far larger. Facebook Payments, a digital goods system that's already mandatory for all game developers, and "other fees" brought in $557 million last year. Facebook charges developers for using its platform by taking a 30-percent cut of Payments revenue. The amount Facebook collects from Facebook Payments transactions is sure to balloon in the coming years. One of the company's stated goals is to enable developers to build on its platform while making Facebook Payments "as convenient as possible for users and platform developers."
Content owners shouldn't worry that Facebook's IPO is similar in scope and hype to that of Google, a company with numerous run-ins with book publishers, record labels and newspapers. Facebook wants people to build and strengthen relationships on its platform. It doesn't want to own or organize content, it just wants to help people share the their thoughts and activities regarding content.
If Facebook's IPO sends any message to entertainment companies it is this: the power of Facebook demands that you improve the social capabilities of your products. Case in point: A Facebook exec revealed earlier this week that 5 billion songs had been shared since September 22 through partnerships with music services. Ticketing services have baked social features into their products, too, transforming fans' discovery and buying process. As if there was any doubt that social is the future, this IPO means there will be no going back after Facebook is a $100 billion company.