Facebook profit slips ahead of stock market debut

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Facebook reported on Monday that its quarterly profit slipped to USD 205 million despite a surge in revenue as it bumped up research and promotion expenses ahead of its stock market debut.

Facebook said its net income in the quarter ended March 31 dipped from the USD 233 million logged in the same period last year despite revenue vaulting to USD 1.06 billion.

While revenue improved year-over-year, it was down about six per cent from the previous quarter. The Facebook revenue figures were below the forecast of industry tracker eMarketer, which lowered its prediction of what that the social network's total advertising revenue this year would be to USD 5.06 billion worldwide.

EMarketer principal analyst Debra Aho Williamson described the start of this year as a 'transition quarter' for Facebook which just rolled out new advertising services and has been investing in mobile offerings.

Facebook passed Yahoo! last year to become the top display advertising seller in the United States, according to eMarketer.

The number of people using Facebook had risen to 901 million by the end of the quarter, according to paperwork filed with the US Securities and Exchange Commission to update earnings and user figures. Facebook is expected to make its much-anticipated stock market debut next month.

The company will trade under the symbol 'FB' on the technology-heavy Nasdaq, it said Monday in paperwork filed with the US Securities and Exchange Commission.

Facebook in February filed to go public and could raise as much as USD 10 billion in the largest flotation ever by an Internet company on Wall Street.

The paperwork filed for the initial public offering provided the first glimpse of the financial details of the web giant launched eight years ago by Mark Zuckerberg from his Harvard University dorm room.

Facebook, which is shifting operations to a former Sun Microsystems campus in the California city of Menlo Park, reported net income of USD 668 million last year.

Revenue nearly doubled to USD 3.7 billion in 2011, with most of it coming from targeted advertising gleaned from personal information shared by the hundreds of millions of users of the platform.

Facebook is the leading social network in all but six countries, notably China and Russia. Its value has been estimated at between USD 75 billion and USD 100 billion.