FACEBOOK INC (FB) IPO

We estimate that our net proceeds from the sale of the Class A common stock 
that we are offering will be approximately $6.8 billion, or approximately 
$6.9 billion if the underwriters exercise in full their right to purchase 
additional shares to cover over-allotments, based on the initial public 
offering price of $38.00 per share, after deducting underwriting discounts 
and commissions and estimated offering expenses payable by us. 

The principal purposes of our initial public offering are to create a 
public market for our Class A common stock and thereby enable future access 
to the public equity markets by us and our employees, obtain additional 
capital, and facilitate an orderly distribution of shares for the selling 
stockholders. We intend to use the net proceeds to us from our initial 
public offering for working capital and other general corporate purposes; 
however, we do not currently have any specific uses of the net proceeds
planned. We may use a portion of the net proceeds to us to satisfy a 
portion of the anticipated tax withholding and remittance obligations 
related to the initial settlement of our outstanding RSUs. Additionally,
we may use a portion of the proceeds to us for acquisitions of complementary 
businesses, technologies, or other assets. However, we have no commitments to 
use the proceeds from this offering for any such acquisitions or investments 
at this time. 

Pending other uses, we intend to invest the proceeds to us in 
investment-grade, interest-bearing securities such as money market funds, 
certificates of deposit, or direct or guaranteed obligations of the U.S. 
government, or hold as cash. We cannot predict whether the proceeds 
invested will yield a favorable return. Our management will have broad 
discretion in the application of the net proceeds we receive from our 
initial public offering, and investors will be relying on the judgment of 
our management regarding the application of the net proceeds. 

We will not receive any proceeds from the sale of shares of Class A common 
stock by the selling stockholders. Mark Zuckerberg, our founder, Chairman, 
and CEO, will offer and sell 30,200,000 shares in our initial public offering. 
The substantial majority of the net proceeds Mr. Zuckerberg will receive upon 
such sale will be used to satisfy taxes that he will incur in connection with 
the partial exercise of an outstanding stock option.

We face significant competition in almost every aspect of our business, 
including from companies such as Google, Microsoft, and Twitter, which offer 
a variety of Internet products, services, content, and online advertising 
offerings, as well as from mobile companies and smaller Internet companies 
that offer products and services that may compete with specific Facebook 
features. We also face competition from traditional and online media 
businesses for a share of advertisers’ budgets and in the development of the 
tools and systems for managing and optimizing advertising campaigns. We 
compete broadly with Google’s social networking offerings, including Google+, 
which it has integrated with certain of its products, including search and 
Android. In addition, we compete with other, largely regional, social 
networks that have strong positions in particular countries, including 
Cyworld in Korea, Mixi in Japan, Orkut (owned by Google) in Brazil and 
India, and vKontakte in Russia. As we introduce new products, as our 
existing products evolve, or as other companies introduce new products 
and services, we may become subject to additional competition. 

The areas in which we compete include: 

• Users and Engagement. We compete to attract, engage, and retain users. 
Because our products for users are free of charge, we compete based on the 
utility, ease of use, performance, and quality of our products. 

• Advertising. We compete to attract and retain advertisers. We distinguish 
our products by providing reach, relevance, social context, and engagement 
to amplify the effectiveness of advertisers’ messages. 

• Platform. We compete to attract and retain developers to build compelling 
apps and websites that integrate with Facebook. We compete in this area 
primarily based on the value of the tools and APIs we provide to developers 
to enable them to access our large global base of engaged users and their 
connections and to drive traffic to their apps and websites. 

• Talent. We compete to attract and retain highly talented individuals, 
especially software engineers, designers, and product managers. Competition 
for employee talent is particularly intense in the San Francisco Bay Area, 
where we are headquartered. We compete for these potential employees by 
providing a work environment that fosters and rewards creativity and 
innovation and by providing compensation packages that we believe will enable 
us to attract and retain key employees. 
   
While our industry is evolving rapidly and is becoming increasingly 
competitive, we believe that we compete favorably on the factors described 
above.