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Facebook files for $US5 billion

Company seeks to raise half of what was expected.

Social networking giant Facebook has filed papers to become a public company, hoping to raise $US5 billion ($4.66 billion) to further fund its operations.

If successful, the initial public offering (IPO) will be the largest ever for a technology company, even bigger than Google's in 2004.

Social network giant Facebook is seeking to raise US$5billion in a public float.
Social network giant Facebook is seeking to raise US$5billion in a public float. 

But the target is half of what was widely expected. A $US10 billion IPO would have valued the 845-million-user social network at US$100 billion, roughly $US120 per user.

A dorm room project for Harvard dropout Mark Zuckerberg that exploded in popularity and vaulted to Silicon Valley's top tier within 8 years, said in its preliminary filing that its net income rose 65 per cent to $US1 billion in 2011, off revenue of $US3.71 billion.

The long-awaited submission kicks off a months-long process that will culminate in Silicon Valley's biggest coming-out party since the heyday of the dotcom boom and bust.

Facebook, which said it now has 845 million active users, appointed Morgan Stanley, Goldman Sachs and JPMorgan its lead underwriters. Other bookrunners included Bank of America, Merrill Lynch, Barclays Capital and Allen & Co.

Facebook had previously been expected to raise US$10 billion in what would have been the fourth-largest IPO in US history, after Visa, General Motors, and AT&T Wireless, according to Thomson Reuters data.

Reuters

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