The Most Important Document for Investors This Year

According to a weekend report in The New York Times, Facebook could file its IPO prospectus this week. Let's hope the newspaper has it right. We'll finally know whether co-founder and CEO Mark Zuckerberg believes he's leading a company worth $100 billion in market value.

The social network's IPO document matters for a variety of other reasons, too. At the very least, we'll get details of its distribution deal with Zynga (Nasdaq: ZNGA  ) and a closer look at the big spenders on its customer list. We'll also get a better understanding of just how much Microsoft (Nasdaq: MSFT  ) stands to make from its early bet on Facebook.

What else might we find out? Here are three big questions I'm hoping to see answered:

  • What's a profile worth? We've seen varying figures on this over the years. Last time I did the math in 2009, each user profile was worth about $4. Today, if rumors that Facebook commands a $100 billion valuation prove true, then every one of the social network's 800 million users is now worth ... wait for it ... $125, a 30-bagger in two years. Talk about outrageous growth.
  • How profitable is social advertising? We don't yet know what Facebook makes on a gross basis, but we do know that its primary competitor, Google (Nasdaq: GOOG  ) , takes in about $0.65 for every dollar of revenue after direct expenses. Is the social network more profitable?
  • What about mobile? Computing is becoming an increasingly mobile experience thanks to rising demand for smartphones and tablets. In fact, the most recent data from researcher PQ Media says mobile advertising and marketing rose 53.7% to $3.39 billion last year. How much of Facebook's outrageous growth is due to surging mobile usage?

That's what I'm looking for. Now it's your turn to weigh in. What do you expect to find out when Facebook publishes its prospectus? Let us know by leaving a comment below.

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Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Google at the time of publication. Check out Tim's Web home, portfolio holdings, and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Microsoft and Google. Motley Fool newsletter services have recommended buying shares of Google and Microsoft and creating a bull call spread position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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