Facebook NZ's one man band posts $81k loss

Facebook NZ's one man band posts $81k loss in first full year

By Jonathan Underhill

Oct. 2 (BusinessDesk) - Facebook New Zealand, the local unit of the global social media website, reported a small loss in its first full year of operation, while granting shares to one employee, based on the numbers it reported to the local regulator.

Facebook NZ made a loss of $81,193 in calendar 2011, from a profit of $4,192 in the four months ended Dec. 31, 2010, according to its financial statements released to the Companies Office. Revenue from services was $427,967, up from $127,309 in the previous four-month period.

The results may not tell the full story, say industry analysts. Draft FCB managing director of media operations Derek Lindsay said his estimate of Facebook’s total revenue from New Zealand would be “significantly more than $400,000.”

“Assuming this is meant to be advertising revenue it’s clearly not a reflection of what the marketplace is,” he told BusinessDesk.

The figures don’t reveal if New Zealand contributes in other ways to group revenue at Facebook, such as in multi-country advertising deals.

The results show employee benefits were the biggest expense in 2011, at $361,999. The accounts don’t show total employees for New Zealand though detailed in the notes under its stock incentive plan it lists one employee granted options for 530 restricted ordinary shares in Facebook.

Facebook’s registered office in New Zealand is given as law firm Kensington Swan in Wellington and the two directors of the local business are California-based Cipora Herman and Theodore Ullyot.

A Google search didn’t track down a physical address and the only employee with oversight of New Zealand came back as Adnan Khan, who gained publicity this year in articles in the National Business Review and Computerworld over the accumulation of fake followers on Twitter.

Khan reset his Twitter account amid the fake follower controversy, the NBR reported in June. He couldn’t immediately be reached for comment.

Shares of Menlo Park, California-based Facebook have tumbled 42 percent from their initial public offering price of US$38 in May and recently traded at US$21.99. The IPO valued Facebook at US$104 billion, making it the largest-ever such valuation for a newly listed public company.

The social media site has more than 900 million users though its shares have suffered amid doubts it can make money from its vast pool of users to the extent it has hoped.

In July, the company posted a second-quarter net loss of $157 million, compared to a year-earlier profit of $240 million. Revenue in the quarter jumped 32 percent to $1.18 billion.

(BusinessDesk)

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