Feeds

Banks toss $8bn into Facebook's lap ahead of IPO

Not worried that FB's coughed to having fake users

Reducing security risks from open source software

Facebook has admitted that some of its 845 million accounts might be fake or duplicated user identities, but that doesn't seem to be worrying the banks since they have doubled the social network's loans to $8bn to take care of its market debut.

Facebook said in additional filings to the Securities and Exchange Commission (SEC) that it now has secured a $5bn credit facility for "working capital and other general corporate purposes" – up from a previous promise of $2.5bn. And just in case that doesn't quite cover things, it also secured a bridge loan, which will give it access to an additional $3bn specifically to fund its tax obligations.

After some pundit chatter about whether Facebook really had the number of active users it was claiming it had, the firm admitted that it couldn't really know for sure that all of its 845 million users worldwide were individual accounts.

"There may be individuals who have multiple Facebook accounts in violation of our terms of service, despite our efforts to detect and suppress such behaviour," the filing conceded.

"We estimate that false or duplicate accounts may have represented approximately 5 to 6 per cent of our monthly active users as of December 2011."

In the case of mobile users, canny folk pointed out that Facebook apps might be contacting the social network's servers for updates automatically without the user being active at all. Facebook also acknowledged this issue, but said it wasn't a big problem in its user count.

"We estimate that less than 5 per cent of our estimated worldwide daily active users as of December 31, 2011 and 2010 resulted from this type of automatic mobile activity, and that this type of activity had a substantially smaller effect on our estimate of worldwide monthly active users and mobile monthly active users," the filing said.

Facebook also had to point out that, since it last spoke to the SEC, it had started to have a little problem with Yahoo!, which is now claiming that the social network is infringing on some of its patents and it wants some licences fees now please, or it'll see Facebook in court.

"We presently are involved in a number of lawsuits, and as we face increasing competition and gain an increasingly high profile, including in connection with our initial public offering, we expect the number of patent and other intellectual property claims against us to grow," Facebook said.

"For example, on February 27, 2012, we received a letter from Yahoo! Inc that alleged that a number of our products infringe the claims of 13 of Yahoo’s patents.

"We are still in the process of investigating the allegations contained in the letter. To date, Yahoo has not commenced any legal action against us, but it may do so in the future," it added.

Clearly this risk isn't bothering Wall Street too much though, since with its 25 new underwriters, Facebook now has pretty much the whole Street backing its coming out party. The social network has most of the big boys in its stable, as well as some of the smaller financial houses, including Morgan Stanley, JP Morgan, Goldman Sachs, Merrill Lynch, Deutsche Bank and Wells Fargo, to name a few.

Facebook now has a total of 31 underwriters, which are the banks that get potential investors interested in a new issue and sell the stocks, guaranteeing a price for a certain number of the shares. ®

Mobile application security vulnerability report

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple ran off to IBM
But never fear fanbois, you're still lapping up iPhones, Macs
Nadella: Apps must run on ALL WINDOWS – PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.