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Facebook files for $5 billion IPO

Facebook filed for a $5 billion initial public offering (IPO) just after 5 p.m. on Feb. 1. The company said in documents filed with the Securities and Exchange Commission (SEC) that it will use the ticker symbol “FB” and detailed its offerings for advertisers and marketers.

Morgan Stanley will underwrite the IPO, along with J.P. Morgan, Goldman Sachs, Bank of America-Merrill Lynch, Barclays Capital and Allen and Company, according to the Form S-1 registration document filed with the SEC.

With 845 million monthly active users, Facebook said in its filing that it provides marketers and advertisers value in the form of access to user information such as age, location, gender and interests.

“We offer advertisers a unique combination of reach, relevance, social context and engagement to enhance the value of their ads,” the prospectus states. “Advertisers can specify that we show their ads to a subset of our users based on demographic factors and specific interests they have chosen to share with us on Facebook or by using the ‘like’ button around the Web. We allow advertisers to select relevant and appropriate audiences for their ads, ranging from millions of users in the case of global brands to hundreds of users in the case of smaller, local businesses.”

Facebook also said in the filing that “the recommendations of friends have a powerful influence on consumer interest and purchase decisions” and said it offers advertisers “the ability to use ‘social context’ with their marketing messages,” which it defined as information that highlights connections between friends and brands, including “likes” and Facebook Places check-ins.

Facebook recorded revenue of $3.7 billion in 2011, a 97% increase compared with the prior year, according to the filing.

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