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Report makes new estimates on Facebook revenues

By Dan Pearson

Fri 07 Jan 2011 10:54am GMT / 5:54am EST / 2:54am PST

Unaudited Goldman Sachs document says $1.2bn in first nine months of 2010

A new document circulated to some of the richest customers of US investment firm Goldman Sachs has estimated that Facebook made $1.2 billion (777m) in revenues in the first nine months of 2010, and $355 million (229.8m) in net income.

The information was fed to Reuters by an anonymous figure under NDA not to reveal the details, who said that "the financial statements were not audited and offered little detail about how Facebook generates it revenue".

"It just shows you that these business can generate 30 percent to 40 percent, potentially, operating margins," said Ryan Jacob of the Jacob Internet Fund. "They probably did at least $500 million in net income in 2010."

The figures come from a 101 page memorandum containing details of Goldman Sachs' investment round in which it is attempting to raise at least $1.5 billion from investors to buy stock in Facebook. The company is also investing a further $450 million of its own equity in the deal.

Goldman Sachs recently valued Facebook at $50 billion during a previous round of investment funding which raised $450 million. Potential investors have until the end of today to commit to the new funding, before wiring money to the bank by Tuesday.

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