Facebook denies losses as IPO plans gather pace

14 Jun 2011

Social networking giant Facebook has denied it is losing users, claiming 50pc of active users log on every day. The denial comes as it appears the company is getting ready to file documents with the SEC regarding a US$100bn IPO next year.

The company was responding to claims that Facebook’s growth has been stalling, particularly in countries like the US and Canada.

Siliconrepublic.com yesterday reported on figures from Inside Facebook that estimated the company gained 11.8m more people in May, after a gain of 13.9m in April. This compares to a gain of 20m new users, on average, in the past 12 months.

Inside Facebook believes that while the growth was mostly stimulated by regions late in adopting Facebook, regions where the service was already popular for a number of years saw a drop in membership.

The US lost 6m Facebook users, falling to 149.4m, and Canada’s Facebook membership dropped by 1.52m users. The UK, Norway and Russia all posted losses of more than 100,000 Facebook users.

However, a Facebook spokesperson says the figures are wrong. “People have been speculating about this for years and have been wrong. Every. Single. Time!

“From time to time, we see stories about Facebook losing users in some regions. Some of these reports use data extracted from our advertising tool, which provides broad estimates on the reach of Facebook ads and isn’t designed to be a source for tracking the overall growth of Facebook.

“We are very pleased with our growth and with the way people are engaged with Facebook. More than 50pc of our active users log onto Facebook in any given day,” the Facebook spokesperson said.

Facebook hurtles towards its ‘inevitable’ IPO

In related news, CNBC reported last night that the company is planning to IPO next spring, driven by SEC rules whereby if a company has 500 or more investors it must begin producing quarterly financial results.

Facebook is likely to pass the 500-investor threshold this year.

If the social networking giant – which is about to reach 700m users worldwide – IPOs, it is likely to be with a valuation of about US$100bn.

Facebook’s COO Sheryl Sandberg last month said an IPO was “inevitable” and described it as “the next big thing that happens.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years