Facing up to max profits

Facebook's 2011 revenues weren't as high as most analysts anticipated. The final figure, revealed in a federal filing required as the company goes public, was only $3.7 billion. The profit was a scant $1 billion.

Yet the expert consensus is that Facebook will be valued somewhere between $75 billion and $100 billion when it makes its debut in the stock market this spring. In other words, lots of folks really like Facebook's upward investment potential.

And the $5 billion initial public offering Facebook announced Wednesday is just the first step aimed at raising up to $10 billion from selling shares in the company.

The dwindling few who haven't faced up to the modern reality and marketability of the social-media boom might still be puzzled about what has made Facebook such a prolific money maker -- so far.

The answer: access to the more than 840 million people around the world already on Facebook. Roughly 85 percent of last year's revenue came from advertising, with the remainder from social gaming and other fees.

Security and privacy concerns have not, to this point, slowed soaring membership -- and apparent enthusiasm for buying into the company.

Graffiti artist David Choe, however, already has his Facebook stake, thanks to his savvy 2005 call to take stock rather than cash for painting the company's office walls in Palo Alto, Calif. If the stock sale goes as predicted, Mr. Choe's shares are predicted to be worth around $200 million.

But in his IPO letter to potential investors, Facebook founder Mark Zuckerberg wrote: "We don't build services to make money; we make money to build better services. These days I think more and more people want to use services from companies that believe in something beyond simply maximizing profits."

And when you're worth $28 billion or so at age 27, as Mr. Zuckerberg is, merely "maximizing profits" probably does seem a bit "been there, done that."