Meta Platforms, Inc. (META) 2013年年度報告「NASDAQ」.pdf

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1、 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,D.C.20549 _FORM 10-K_(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2013 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE AC

2、T OF 1934 For the transition period from to Commission File Number:001-35551 _FACEBOOK,INC.(Exact name of registrant as specified in its charter)_ Delaware20-1665019(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification Number)1601 Willow Road,Menlo Park,Califor

3、nia 94025(Address of principal executive offices and Zip Code)(650)543-4800(Registrants telephone number,including area code)_Securities registered pursuant to Section 12(b)of the Act:Class A Common Stock,$0.000006 par valueThe NASDAQ Stock Market LLC(Title of each class)(Name of each exchange on wh

4、ich registered)Securities registered pursuant to Section 12(g)of the Act:None(Title of class)Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant

5、to Section 13 or Section 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934(Exchange Act)during the preceding 12 months(or for such shorter period that the registrant was requi

6、red to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website,if any,every Interactive Data File required to be submitted and posted pursuant to R

7、ule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit and post such files).Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K(229.405 of this chapter)

8、is not contained herein,and will not be contained,to the best of registrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.Indicate by check mark whether the registrant is a large accelerated filer,a

9、n accelerated filer,a non-accelerated filer,or a smaller reporting company.See definition of large accelerated filer,accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.(Check one):Large accelerated filerAccelerated filerNon-accelerated filer (Do not check if a smaller

10、reporting company)Smaller reporting companyIndicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant as of June 28,2013,the last business

11、 day of the registrants most recently completed second fiscal quarter,was$49,067,097,971 based upon the closing price reported for such date on the NASDAQ Global Select Market.On January 28,2014,the registrant had 1,975,722,473 shares of Class A common stock and 574,020,314 shares of Class B common

12、stock outstanding.DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrants Proxy Statement for the 2014 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein.Such proxy statement will be filed with the Se

13、curities and Exchange Commission within 120 days of the registrants fiscal year ended December 31,2013.2FACEBOOK,INC.FORM 10-K TABLE OF CONTENTS Note About Forward-Looking Statements3Limitations of Key Metrics and Other Data4PART IItem1.Business5Item1A.Risk Factors13Item 1B.Unresolved Staff Comments

14、31Item 2.Properties31Item 3.Legal Proceedings31Item 4.Mine Safety Disclosures31PART IIItem 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities32Item 6.Selected Financial Data34Item 7.Managements Discussion and Analysis of Financial Condition a

15、nd Results of Operations36Item 7A.Quantitative and Qualitative Disclosures About Market Risk56Item 8.Financial Statements and Supplementary Data57Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure85Item 9A.Controls and Procedures85Item 9B.Other Information85P

16、ART IIIItem 10.Directors,Executive Officers and Corporate Governance86Item 11.Executive Compensation86Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters86Item 13.Certain Relationships and Related Transactions,and Director Independence86Item 14.Prin

17、cipal Accounting Fees and Services86PART IVItem 15.Exhibits,Financial Statement Schedules87Signatures3NOTE ABOUT FORWARD-LOOKING STATEMENTSThis Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.All statements con

18、tained in this Annual Report on Form 10-K other than statements of historical fact,including statements regarding our future results of operations and financial position,our business strategy and plans,and our objectives for future operations,are forward-looking statements.The words believe,may,will

19、,estimate,continue,anticipate,intend,expect,and similar expressions are intended to identify forward-looking statements.We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition

20、,results of operations,business strategy,short-term and long-term business operations and objectives,and financial needs.These forward-looking statements are subject to a number of risks,uncertainties and assumptions,including those described in Part I,Item 1A,Risk Factors in this Annual Report on F

21、orm 10-K.Moreover,we operate in a very competitive and rapidly changing environment.New risks emerge from time to time.It is not possible for our management to predict all risks,nor can we assess the impact of all factors on our business or the extent to which any factor,or combination of factors,ma

22、y cause actual results to differ materially from those contained in any forward-looking statements we may make.In light of these risks,uncertainties and assumptions,the future events and trends discussed in this Annual Report on Form 10-K may not occur and actual results could differ materially and

23、adversely from those anticipated or implied in the forward-looking statements.We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements,except as required by law.Given these risks and uncertainties,readers are cautioned not to place undu

24、e reliance on such forward-looking statements.Unless expressly indicated or the context requires otherwise,the terms Facebook,company,we,us,and our in this document refer to Facebook,Inc.,a Delaware corporation,and,where appropriate,its wholly owned subsidiaries.The term Facebook may also refer to o

25、ur products,regardless of the manner in which they are accessed.For references to accessing Facebook on the web or via a website,such terms refer to accessing Facebook on desktop or personal computers.For references to accessing Facebook on mobile,such term refers to accessing Facebook via a mobile

26、application or via a mobile-optimized version of our website such as ,whether on a mobile phone or tablet.4LIMITATIONS OF KEY METRICS AND OTHER DATAThe numbers for our key metrics,which include our daily active users(DAUs),mobile DAUs,monthly active users(MAUs),mobile MAUs,and average revenue per us

27、er(ARPU),as well as certain other metrics such as mobile-only DAUs and mobile-only MAUs,are calculated using internal company data based on the activity of user accounts.While these numbers are based on what we believe to be reasonable estimates of our user base for the applicable period of measurem

28、ent,there are inherent challenges in measuring usage of our products across large online and mobile populations around the world.For example,there may be individuals who maintain one or more Facebook accounts in violation of our terms of service.We estimate,for example,that duplicate accounts(an acc

29、ount that a user maintains in addition to his or her principal account)may have represented between approximately 4.3%and 7.9%of our worldwide MAUs in 2013.We also seek to identify false accounts,which we divide into two categories:(1)user-misclassified accounts,where users have created personal pro

30、files for a business,organization,or non-human entity such as a pet(such entities are permitted on Facebook using a Page rather than a personal profile under our terms of service);and(2)undesirable accounts,which represent user profiles that we determine are intended to be used for purposes that vio

31、late our terms of service,such as spamming.In 2013,for example,we estimate user-misclassified accounts may have represented between approximately 0.8%and 2.1%of our worldwide MAUs and undesirable accounts may have represented between approximately 0.4%and 1.2%of our worldwide MAUs.We believe the per

32、centage of accounts that are duplicate or false is meaningfully lower in developed markets such as the United States or United Kingdom and higher in developing markets such as India and Turkey.However,these estimates are based on an internal review of a limited sample of accounts and we apply signif

33、icant judgment in making this determination,such as identifying names that appear to be fake or other behavior that appears inauthentic to the reviewers.As such,our estimation of duplicate or false accounts may not accurately represent the actual number of such accounts.We are continually seeking to

34、 improve our ability to identify duplicate or false accounts and estimate the total number of such accounts,and such estimates may change due to improvements or changes in our methodology.Due to inherent variability in such estimates at particular dates of measurement,we disclose these estimates as

35、a range over a recent period.Our data limitations may affect our understanding of certain details of our business.For example,while user-provided data indicates a decline in usage among younger users,this age data is unreliable because a disproportionate number of our younger users register with an

36、inaccurate age.In the third quarter of 2013,we worked with third parties to develop models to more accurately analyze user data by age in the United States.These models suggested that usage by U.S.teens overall was stable,but that DAUs among younger U.S.teens had declined.The data and models we are

37、using are not precise and our understanding of usage by age group may not be complete.Some of our historical metrics through the second quarter of 2012 were also affected by applications on certain mobile devices that automatically contact our servers for regular updates with no user action involved

38、,and this activity can cause our system to count the user associated with such a device as an active user on the day such contact occurs.For example,we estimate that less than 5%of our estimated worldwide DAUs as of December 31,2011 and 2010 resulted from this type of automatic mobile activity,and t

39、hat this type of activity had a substantially smaller effect on our estimate of worldwide MAUs and mobile MAUs.The impact of this automatic activity on our metrics varies by geography because mobile usage varies in different regions of the world.In addition,our data regarding the geographic location

40、 of our users is estimated based on a number of factors,such as the users IP address and self-disclosed location.These factors may not always accurately reflect the users actual location.For example,a mobile-only user may appear to be accessing Facebook from the location of the proxy server that the

41、 user connects to rather than from the users actual location.The methodologies used to measure user metrics may also be susceptible to algorithm or other technical errors.For example,in early June 2012,we discovered an error in the algorithm we used to estimate the geographic location of our users t

42、hat affected our attribution of certain user locations for the period ended March 31,2012.While this issue did not affect our overall worldwide DAU and MAU numbers,it did affect our attribution of users across different geographic regions.We estimate that the number of MAUs as of March 31,2012 for t

43、he United States&Canada region was overstated as a result of the error by approximately 3%and this overstatement was offset by understatements in other regions.The number of such users for the period ended March 31,2012 disclosed in Managements Discussion and Analysis of Financial Condition and Resu

44、lts of Operations-Trends in Our User Metrics reflect the reclassification to more correctly attribute users by geographic region.Our estimates for revenue by user location and revenue by user device are also affected by these factors.We regularly review and may adjust our processes for calculating t

45、hese metrics to improve their accuracy.In addition,our DAU and MAU estimates will differ from estimates published by third parties due to differences in methodology.For example,some third parties are not able to accurately measure mobile users or do not count mobile users for certain user groups or

46、at all in their analyses.The numbers of DAUs,mobile DAUs,MAUs,mobile MAUs,mobile-only DAUs and mobile-only MAUs discussed in this Annual Report on Form 10-K,as well as ARPU,do not include users of Instagram unless they would otherwise qualify as such users,respectively,based on their other activitie

47、s on Facebook.In addition,other user engagement metrics included herein do not include Instagram unless otherwise specifically stated.5PART IItem 1.Business Overview Our mission is to give people the power to share and make the world more open and connected.We build technology to enable faster,easie

48、r and richer communication.Hundreds of millions of people use Facebooks websites and mobile applications every day to stay connected with their friends and family,to discover and learn what is going on in the world around them,and to share and express what matters to them to the people they care abo

49、ut.Our business focuses on creating value for users,marketers,and developers.How We Create Value for People Who Use Facebook Our top priority is to build useful and engaging products that enable people to:Connect and Share with Friends.With more than 1.2 billion monthly active users(MAUs)worldwide,F

50、acebook users are able to find and stay connected with their friends,family,and colleagues on Facebook.Discover and Learn.We believe that people come to Facebook to discover and learn more about what is going on in the world around them,particularly in the lives of their friends and family and with

51、public figures and organizations that interest them.Each persons experience on Facebook is unique based on the content shared by his or her friends and connections.Express Yourself.We enable people to share their opinions,ideas,photos and videos,and activities with audiences ranging from their close

52、st friends to the public at large,giving everyone a voice within the Facebook community.Through Facebooks privacy and sharing settings,people can control what they share and with whom they share it.Stay Connected Everywhere.People can access Facebook through our website,mobile sites,smartphone appli

53、cations,and feature phone products.Through mobile and web applications built by developers that integrate with Facebook,people can interact with their Facebook friends while playing games,listening to music,watching movies,reading news,and engaging in other activities across the web and on mobile de

54、vices.We had 757 million daily active users(DAUs)on average in December 2013,an increase of 22%compared to December 2012.We had 556 million DAUs who accessed Facebook from a mobile device on average in December 2013,an increase of 49%compared to December 2012.How We Create Value for Marketers Facebo

55、ok focuses on providing value for all kinds of marketers,including brand marketers,direct marketers,small and medium-sized businesses,and developers.We help marketers achieve their business objectives,such as increasing online sales,in-store sales,or awareness of their brands,products,or services.We

56、 generate the substantial majority of our revenue from selling advertising placements to marketers.We offer marketers the following benefits:Targeted Reach.With over 1.2 billion MAUs using our service every month,Facebook offers marketers the ability to reach their existing and prospective customers

57、.Marketers can target their ads to people on Facebook based on demographic factors such as age,location,gender,education,and specific interests that users have chosen to share with us.In addition,marketers may choose to match their own data or third-party data with ours,so they can find existing cus

58、tomers or potential new ones directly on Facebook.We also offer marketers the ability to include social context with their marketing messages.Social context is information that highlights a friends connections with a particular brand or business,and we believe that social context improves ad effecti

59、veness.Engagement.We offer marketers access to one of the most highly engaged consumer networks in the world.According to eMarketer,in 2013,people spent more time with digital media than watching TV for the first time.We believe marketing dollars will follow this shift in consumer time,and we offer

60、marketers a place to shift their spend given our large and highly engaged audience.Facebook Ads.Our ads offer marketers the opportunity to communicate their messages to consumers and to direct them to specific destinations such as a web page or a Facebook Page.Marketers purchase ads that can appear

61、in multiple locations including in the right-hand side of most page types on personal computers and in the News Feed on personal 6computers or mobile devices.Our ads are effectively integrated into the Facebook experience in a manner designed to deliver impressive returns for marketers while optimiz

62、ing the user experience.Facebook Ad System.Our ad creation tools are designed to align with marketers advertising goals.When marketers create an ad campaign on Facebook,they can specify their marketing objectives and the types of people they want to reach.In addition,marketers can use our products s

63、uch as Custom Audiences to more precisely target people such as those who have previously expressed interest in that particular marketer.Using our ad system,marketers indicate the maximum price they are willing to pay for their ad,either per click(CPC),per action(CPA),or per thousand impressions(CPM

64、),and their maximum budget.Our system also supports guaranteed delivery of a fixed number of ad impressions for a fixed price.Facebooks ad serving technology dynamically determines the best available ad to show each user based on the combination of the users unique attributes and the real-time compa

65、rison of bids from eligible ads.We enable marketers to deploy and adjust campaigns rapidly.Ad Measurement.Marketers can use our platform to track and optimize both the in-store and online performance of their ad campaigns.Offline and online conversion measurement and partnerships with third parties

66、help marketers understand how their ad investments impact specific business outcomes(e.g.in-store sales,offsite conversions,application installs).These insights also help marketers make modifications to their ad campaigns to maximize results.How We Create Value for DevelopersFacebook provides a set

67、of development tools and application programming interfaces(APIs)that enable developers to easily integrate with Facebook to create mobile and web applications.We are focused on providing developers with unique tools to support their mobile and web applications.We generate revenue from developers wh

68、o use our Payments infrastructure to sell virtual and digital goods to our users on personal computers.We also generate revenue from developers who choose to purchase ads from us.We support developers efforts to build,grow,and monetize their mobile and web applications:Build.We provide tools and ser

69、vices that accelerate and enhance cross-platform mobile and web application development.With Facebook Login,developers can offer their users a single identity across platforms,which provides a fast and secure way for people to sign in.Facebook Login also enables developers to design applications tha

70、t feel familiar to each user by bringing their Facebook identity to the application experience.Through our Parse service,we enable developers to focus on creating engaging front-end user experiences while using our service to handle complex back-end infrastructure,services and server maintenance.Gro

71、w.We provide developers with tools to increase the exposure,distribution and engagement of their mobile and web applications.By using our tools for sharing,invites,requests,and mobile application ads,developers have unique ways to drive application discovery and user engagement.Mobile application ad

72、s enable developers to grow awareness and usage of their applications and can feature a call to action such as install or shop now.Mobile application ads for install actions appear in the Facebook News Feed and take people directly to the application store to download.If a mobile developer would lik

73、e to target users who already have their application installed,they can link users from the News Feed ad to a customized,specific location inside the application,such as a sale,promotion or specific content such as a new album or hotel listing.In addition,social plugins,such as the Like button,are s

74、ocial features that developers can easily integrate with their websites by incorporating a few lines of HTML code.Social plugins enable developers to provide engaging and personalized social experiences to their users.Monetize.On the web,we provide an online Payments infrastructure that enables deve

75、lopers to receive payments from our users in an easy-to-use,secure,and trusted environment.Our Payments infrastructure enables users on personal computers to purchase virtual or digital goods from developers and third-party websites by using debit and credit cards,PayPal,mobile phone payments,gift c

76、ards or other methods.Currently,substantially all of our Payments revenue is from users purchases of virtual goods used in social games on personal computers.We receive a fee of up to 30%when users make such purchases from developers using our Payments infrastructure.In 2013,developers received more

77、 than$2.1 billion from transactions enabled by our Payments infrastructure.While mobile applications can also integrate with Facebook,mobile applications do not process transactions using our Payments infrastructure.Our Products Facebook.The Facebook mobile app and website enable people to connect,s

78、hare,discover,and communicate with each other on mobile devices and personal computers.Facebook is free and available throughout the world.The Facebook website and mobile app includes the following features:-News Feed.News Feed is the core feature of a persons homepage on the Facebook website and mo

79、bile app and 7is a regularly updating list of stories from friends,Pages,and other entities to which the person is connected.It includes posts,photos,event updates,group memberships,application updates,and other activities.Each persons News Feed is personalized based on his or her interests and the

80、sharing activity of his or her friends and connections.Stories in each persons News Feed are prioritized based on several factors,including how many friends have Liked or Commented on a certain piece of content,who posted the content,and what type of content it is.-Timeline.Timeline allows people to

81、 organize and display the events and activities that matter most to them,enabling them to curate their memories in a searchable personal narrative that is organized chronologically.People choose what information to share on their Timeline,such as their interests,photos,education,work history,relatio

82、nship status,and contact information,and people can control with whom content is shared on their Timeline.-Graph Search.Graph Search is a structured search tool that enables people to find people,places,photos and other information shared with them on Facebook.People can search using simple phrases

83、such as Photos of my friends in New York or Restaurants in London that my friends have been to,and browse the results.Once turned on,Graph Search replaces the search bar at the top of every page on Facebook.Graph Search beta is available on the web for people using the site in English,and we are pla

84、nning to expand Graph Search to mobile and international audiences in the future.Messenger.Messenger is a mobile-to-mobile messaging application available on iOS and Android phones.Messenger works similarly to texting(SMS)to let people reach others instantly.Instagram.Instagram is a mobile app and w

85、ebsite that enable people to take photos or videos,customize them with filter effects,and share them with friends and followers in a photo feed or send them directly to friends.Our Strategy We are in the early stages of pursuing our mission to make the world more open and connected.We believe we hav

86、e a significant opportunity to further enhance the value we deliver to users,developers,and marketers.Key elements of our strategy are:Expand Our Global Community.There are more than 1.5 billion internet users on personal computers,and more than three billion mobile users worldwide according to GSMA

87、 Wireless Intelligence,and we aspire to someday connect all of these people.As of December 31,2013,we had 1.23 billion MAUs globally.We intend to increase the size of our network by continuing our marketing and user acquisition efforts,enhancing our products including mobile applications,and making

88、Facebook more easily accessible to people throughout the world.We are focused on increasing the number of people using Facebook across all geographies,including relatively less-developed markets.Our investments include efforts to make Facebook accessible on feature phones,reducing the amount of data

89、 required to utilize our service,and investing in increasing the number of people who have access to the internet including through industry partnerships such as Internet.org.Develop Great Social Products to Increase Engagement.We prioritize product development investments that we believe will drive

90、 user engagement.We continue to invest significantly in improving our existing products such as News Feed,Timeline,and Graph Search and our stand-alone mobile applications such as Messenger and Instagram.For example,we are continually improving our ability to analyze and organize vast amounts of inf

91、ormation in real time to enable us to select the unique content that we believe will be most interesting to show to each user.We are also focused on developing new products,including new stand-alone applications,to increase engagement.Increasing user engagement is a core part of our strategy to maxi

92、mize our long-term business performance and therefore we are willing to sacrifice short-term monetization in order to increase engagement.Increase the Utility of our Service and Provide the Most Compelling User Experience.We aim to maximize the utility we create for people using our service.We are i

93、nvesting significantly in improving our products and developing new products,including new stand-alone applications,in order to create more value and make the Facebook experience more useful.We also enable developers to integrate their mobile and web applications with Facebook in order to increase u

94、tility for our users.Improve Our Ad Products.We are investing to improve our ad products in order to attract more marketers to work with Facebook,to create more value for marketers,and to enhance marketers ability to make their advertising more relevant for users.Our advertising strategy centers on

95、the belief that ad products that are relevant,well-targeted,social,and well-integrated with other content on Facebook can enhance the user experience while providing an attractive return for marketers.We intend to invest in additional products for marketers while continuing to balance our monetizati

96、on objectives with our commitment to optimizing the user experience.We will continue to work to develop new tools that help marketers to target their ads most effectively and thereby increase their return on ad spend.We also continue to focus on analytics 8and measurement tools to enable marketers t

97、o evaluate and improve the effectiveness of ad campaigns on Facebook.Excel at Mobile Product Development and Make our Mobile Products Fast,Reliable,and Easily Available.We devote substantial resources to our development of mobile products and experiences for a wide range of platforms,including smart

98、phones,feature phones and tablets.In addition,we are working across the mobile industry with operators,hardware manufacturers,operating system providers,and developers to improve the Facebook experience on mobile devices and make Facebook available to more people around the world.We had 945 million

99、MAUs who used Facebook mobile products as of December 31,2013.We believe that mobile usage of Facebook is critical to user growth and engagement over the long term.Enable Developers to Build,Grow,and Monetize Their Mobile and Web Applications.The success of Facebooks developer ecosystem is an import

100、ant part of our strategy.We continue to invest in tools and APIs that enhance the ability of developers who integrate with Facebook to build valuable and engaging products.Developers can create value for Facebook in multiple ways,including:purchasing advertising on Facebook;using our Payment infrast

101、ructure to facilitate transactions with users on personal computers;sharing content with Facebook that makes our products more engaging;and contributing to our understanding of users interests and preferences.Build a Scalable Infrastructure to Provide the Most Compelling,Robust,and Reliable Product

102、Experience.We are investing in software and hardware infrastructure that enables us to provide a unique,personalized experience to each of our users around the world.We believe the speed and reliability of our products are important competitive advantages.Building and Maintaining User Trust Trust is

103、 a cornerstone of our business.We dedicate significant resources to the goal of building user trust through developing and implementing programs designed to protect user privacy,promote a safe environment,and assure the security of user data.The resources we dedicate to this goal include engineers,a

104、nalysts,lawyers,policy experts,and operations specialists,as well as hardware and software from leading vendors and solutions we have designed and built.Privacy and Sharing.People come to Facebook to connect and share with different audiences.Protecting user privacy is an important part of our produ

105、ct development process.Our objective is to give users choice over what they share and with whom they share it.This effort is fundamental to our business and focuses on control,transparency,and accountability.-Control.We believe that by providing our users with clear and easy-to-use controls,we will

106、continue to promote trust in our products.For example,when a user posts a status update or uploads a photo to Facebook,our in-line controls allow the user to select his or her audience at the same time that he or she is publishing the post.In addition,we provide other data management tools.Activity

107、Log is a unified tool that people can use to review and manage the content they have posted and the actions they have taken on Facebook.When using the Activity Log,a user can view his or her activity with a particular application,delete a specific post,change who can see a photo,or remove an applica

108、tion completely.Additionally,our Download Your Information tool enables users to access and store their personal information off Facebook.-Transparency.Our Data Use Policy describes in plain language our data use practices and how privacy works on Facebook.We also offer a number of tools and feature

109、s that provide users with transparency about their information on Facebook.Our application settings feature enables users to view each of the applications they have chosen to use,the information needed by each application,and the audience with whom the user has chosen to share his or her interaction

110、s with each application.We believe that this transparency enables people to make more informed decisions about their activities on Facebook.-Accountability.We continue to build new procedural safeguards as part of our comprehensive privacy program.These include a dedicated team of privacy profession

111、als who are involved in new product and feature development from design through launch;ongoing review and monitoring of the way data is handled by existing features and applications;and rigorous data security practices.We regularly work with online privacy and safety experts and regulators around th

112、e world.In August 2012,the Federal Trade Commission formally approved a 20-year settlement agreement requiring us to enhance our privacy program and to complete biennial third-party assessments.We also have undergone two audits by the Office of the Irish Data Protection Commissioner.The audits compr

113、ehensively reviewed our compliance with Irish data protection law,which is grounded in European data protection principles.As part of the audit process,we agreed to enhance various data protection and privacy practices to ensure compliance with the law and adherence to industry best practices.Safety

114、.We design our products to include safety tools.These tools are coupled with educational resources and partnerships with online safety experts to offer protections for all users,particularly teenagers.We take into account the unique needs 9of teenagers who use our service and employ age-appropriate

115、settings that restrict their visibility,limit the audience with whom they can share,and help prevent unwanted contact from strangers.Our abuse reporting infrastructure allows anyone on Facebook to report inappropriate,offensive,or dangerous content through report links found throughout our site.We h

116、ave enhanced this reporting system to include Social Reporting,which gives users the option to report content to us,to report content to a trusted friend,or to block the person who posted the content with one easy-to-use tool.Our Safety Advisory Board,comprised of five leading online safety organiza

117、tions from around the world,advises us on product design and helps us to create comprehensive safety resources for everyone who uses our service.These resources are located in our multimedia Family Safety Center on our website,which also offers special information for parents,educators,teenagers,and

118、 members of the law enforcement community.Security.We invest in technology,processes,and people as part of our commitment to safeguarding our users information.We use a variety of techniques to protect the data that we are entrusted with,and we rely on multiple layers of network segregation using fi

119、rewalls to protect against attacks or unauthorized access.We also employ proprietary technologies to protect our users.For example,if we suspect that a users account may have been compromised,we may use a process that we refer to as social authentication to validate that the person accessing the acc

120、ount is the actual account holder.The process of social authentication may include asking the person accessing the account to identify photos of the account holders friends.Our security team actively scans for security vulnerabilities using commercial tools,penetration tests,code security reviews,an

121、d internal and external audits.We also have a network of geographically distributed single-tenant data centers,and we take measures to protect the information stored in these data centers.Competition Our business is characterized by innovation,rapid change,and disruptive technologies.We face signifi

122、cant competition in every aspect of our business,including from companies that provide tools to facilitate the sharing of information,companies that enable marketers to display advertising,and companies that provide development platforms for application developers.We compete to attract,engage,and re

123、tain users,to attract and retain marketers,to attract and retain developers to build compelling mobile and web applications that integrate with Facebook,and to attract and retain highly talented individuals,especially software engineers,designers,and product managers.We compete with the following:Co

124、mpanies that offer full-featured products that replicate the range of communications and related capabilities we provide.These offerings include,for example,Google+,which Google has integrated with certain of its products,including search and Android,as well as other,largely regional,social networks

125、 that have strong positions in particular countries.Companies that develop applications,particularly mobile applications,that provide social functionality,such as messaging,photo-and video-sharing,and micro-blogging.Companies that provide web-and mobile-based information and entertainment products a

126、nd services that are designed to engage users and capture time spent online and on mobile devices.Traditional and online businesses that provide media for marketers to reach their audiences and/or develop tools and systems for managing and optimizing advertising campaigns.As we introduce new product

127、s,as our existing products evolve,or as other companies introduce new products and services,we may become subject to additional competition.Technology We have assembled a team of highly skilled engineers and computer scientists whose expertise spans a broad range of technical areas.We make significa

128、nt investments in product and feature development,data management and personalization technologies,large-scale systems and scalable infrastructure,mobile technologies,and advertising technologies,including:Product and Feature Development.We aim to improve our existing products continuously and to de

129、velop new products for our users,developers,and marketers.Our product development philosophy is centered on continuous innovation in creating products that are social by design,which means that our products are designed to place people and their social interactions at the core of the product experie

130、nce.Data Management and Personalization Technologies.To provide each user with a personalized Facebook experience,we must process and analyze a significant amount of content shared by our users,developers,and marketers and surface the most relevant content in real time.As such,we invest extensively

131、in developing technologies and analytics in areas 10including content optimization and delivery,graph query,media storage and serving,large-scale data management,and software performance.Large-Scale Systems and Scalable Infrastructure.Our products are built on a shared computing infrastructure.We us

132、e a combination of off-the-shelf and custom software running on clusters of commodity computers to amass substantial computing capability.Our infrastructure has enabled the storage and processing of large datasets and facilitated the deployment of our products on a global scale.As our user base grow

133、s,and the level of engagement and sharing from our users continues to increase,our computing needs continue to expand.We aim to provide our products rapidly and reliably to all users around the world,including in countries where we do not expect significant short-term monetization.Mobile Technologie

134、s.In order to provide a high-quality experience on a wide variety of mobile devices and operating systems,we invest in developing novel techniques and technologies including:custom graphics rendering,operating system customizations,development tools,systems for customizing the user experience based

135、on a variety of factors,and systems for monitoring the behavior of the applications in the field.Advertising Technologies.We invest extensively in advertising technology capable of serving billions of ad impressions every day while maximizing the relevance of each impression to selected users based

136、upon the information that users have chosen to share.Our system manages our entire set of ads,the selected audiences,and the marketers bids to determine which ads to show each person and how to display them for every page on Facebook.We use an advanced user action prediction system that weighs many

137、real-time updated features using automated learning techniques.Our technology incorporates the estimated user action rate with both the marketers bid and a user relevancy signal to select what we believe to be the optimal ads to show.Our research and development expenses were$1.4 billion in both 201

138、3 and 2012 and$388 million in 2011.For information about our research and development expenses,see Part II,Item 7,Managements Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations-Research and development of this Annual Report on Form 10-K.Sales and Operation

139、s The majority of our marketers use our self-service ad platform to establish accounts and to launch and manage their advertising campaigns.We also have a global sales force that is focused on attracting and retaining marketers and providing support to them throughout the stages of the advertising c

140、ampaign cycle from pre-purchase decision making to real-time optimizations to post-campaign analytics.We work directly with marketers,through traditional advertising agencies,and with an ecosystem of agencies that have a specialized focus on Facebook advertising.We currently operate more than 30 sal

141、es offices around the globe.We have operations teams to provide support for our users,developers,and marketers in five regional centers located in Menlo Park,California;Austin,Texas;Dublin,Ireland;Hyderabad,India;and Singapore.We also invest in and rely on self-service tools to provide direct custom

142、er support to our users,developers,and marketers.Marketing To date,the Facebook user community has grown virally with users inviting their friends to connect with them,supported by internal efforts to stimulate user awareness and interest.In addition we have invested and will continue to invest in m

143、arketing our services to build our brand and user base around the world.We leverage the utility of our products and our social distribution channels as our most effective marketing tools.In addition,we undertake various user acquisition efforts and regularly host events and conferences to engage wit

144、h developers and marketers.Intellectual Property To establish and protect our proprietary rights,we rely on a combination of patents,patent applications,trademarks,copyrights,trade secrets,including know-how,license agreements,confidentiality procedures,non-disclosure agreements with third parties,e

145、mployee disclosure and invention assignment agreements,and other contractual rights.In addition,to further protect our proprietary rights,from time to time we have purchased patents and patent applications from third parties.We do not believe that our proprietary technology is dependent on any singl

146、e patent or copyright or groups of related patents or copyrights.We believe the duration of our patents is adequate relative to the expected lives of our products.Government Regulation We are subject to a number of U.S.federal and state,and foreign laws and regulations that affect companies conducti

147、ng business on the Internet.Many of these laws and regulations are still evolving and being tested in courts,and could be interpreted in ways that could harm our business.These may involve user privacy,rights of publicity,data protection,content,intellectual property,distribution,electronic contract

148、s and other communications,competition,protection of minors,consumer protection,taxation and online payment 11services.In particular,we are subject to federal,state,and foreign laws regarding privacy and protection of user data.Foreign data protection,privacy,and other laws and regulations can be mo

149、re restrictive than those in the United States.U.S.federal and state and foreign laws and regulations are constantly evolving and can be subject to significant change.In addition,the application and interpretation of these laws and regulations are often uncertain,particularly in the new and rapidly-

150、evolving industry in which we operate,and may be interpreted and applied inconsistently from country to country and inconsistently with our current policies and practices.There are also a number of legislative proposals pending before the U.S.Congress,various state legislative bodies,and foreign gov

151、ernments concerning data protection which could affect us.For example,the European Commission is currently considering a data protection regulation that may include operational requirements for companies that receive personal data that are different than those currently in place in the European Unio

152、n,and that may also include significant penalties for non-compliance.In August 2012,the FTC approved a settlement agreement with us to resolve an investigation into various practices,that,among other things,requires us to complete bi-annual independent privacy assessments and to establish and refine

153、 certain practices with respect to treatment of user information and the privacy settings we offer.Violation of existing or future regulatory orders or consent decrees could subject us to substantial monetary fines and other penalties that could negatively affect our financial condition and results

154、of operations.Various laws and regulations in the United States and abroad,such as the Bank Secrecy Act,the Dodd-Frank Act,the USA PATRIOT Act,and the Credit CARD Act,impose certain anti-money laundering requirements on companies that are financial institutions or that provide financial products and

155、 services.Under these laws and regulations,financial institutions are broadly defined to include money services businesses such as money transmitters,check cashers,and sellers or issuers of stored value.Requirements imposed on financial institutions under these laws include customer identification a

156、nd verification programs,record retention policies and procedures,and transaction reporting.To increase flexibility in how our use of Payments may evolve and to mitigate regulatory uncertainty,we have received certain money transmitter licenses in the United States and expect to apply for certain re

157、gulatory licenses in Europe,which will generally require us to demonstrate compliance with many domestic and foreign laws relating to money transmission,gift cards and other prepaid access instruments,electronic funds transfers,anti-money laundering,counter-terrorist financing,gambling,banking and l

158、ending,and import and export restrictions.Employees As of December 31,2013,we had 6,337 employees.Corporate Information We were incorporated in Delaware in July 2004.We completed our initial public offering in May 2012 and our Class A common stock is listed on The Nasdaq Global Select Market under t

159、he symbol FB.Our principal executive offices are located at 1601 Willow Road,Menlo Park,California 94025,and our telephone number is(650)543-4800.Facebook,the Facebook logo,FB,the Like button,Instagram and our other registered or common law trademarks,service marks,or trade names appearing in this A

160、nnual Report on Form 10-K are the property of Facebook,Inc.or its affiliates.Other trademarks,service marks,or trade names appearing in this Annual Report on Form 10-K are the property of their respective owners.Information about Segment and Geographic Revenue Information about segment and geographi

161、c revenue is set forth in Notes 1 and 14 of our Notes to Consolidated Financial Statements included in Part II,Item 8,Financial Statements and Supplementary Data of this Annual Report on Form 10-K.Available Information Our website address is .Our Annual Report on Form 10-K,Quarterly Reports on Form

162、10-Q,Current Reports on Form 8-K,and amendments to reports filed pursuant to Sections 13(a)and 15(d)of the Securities Exchange Act of 1934,as amended(Exchange Act),are filed with the U.S.Securities and Exchange Commission(SEC).We are subject to the informational requirements of the Exchange Act and

163、file or furnish reports,proxy statements,and other information with the SEC.Such reports and other information filed by the Company with the SEC are available free of charge on our website at when such reports are available on the SECs website.We use our website as a means of disclosing material non

164、-public information and for complying with our disclosure obligations under Regulation FD.Accordingly,investors should monitor such portions of ,in addition to following SEC filings and public conference calls and webcasts.The public may read and copy any materials filed by Facebook with the SEC at

165、the SECs Public Reference Room at 100 F Street,NE,Room 1580,Washington,DC 20549.The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.The SEC maintains an Internet site that contains reports,proxy and information statements and other inf

166、ormation regarding issuers that file electronically with the SEC at www.sec.gov.12The contents of the websites referred to above are not incorporated into this filing.Further,our references to the URLs for these websites are intended to be inactive textual references only.13Item 1A.Risk Factors Cert

167、ain factors may have a material adverse effect on our business,financial condition,and results of operations.You should consider carefully the risks and uncertainties described below,in addition to other information contained in this Annual Report on Form 10-K,including our consolidated financial st

168、atements and related notes.The risks and uncertainties described below are not the only ones we face.Additional risks and uncertainties that we are unaware of,or that we currently believe are not material,may also become important factors that adversely affect our business.If any of the following ri

169、sks actually occurs,our business,financial condition,results of operations,and future prospects could be materially and adversely affected.In that event,the trading price of our Class A common stock could decline,and you could lose part or all of your investment.Risks Related to Our Business and Ind

170、ustryIf we fail to retain existing users or add new users,or if our users decrease their level of engagement with Facebook,our revenue,financial results,and business may be significantly harmed.The size of our user base and our users level of engagement are critical to our success.Our financial perf

171、ormance has been and will continue to be significantly determined by our success in adding,retaining,and engaging active users.We anticipate that our active user growth rate will continue to decline over time as the size of our active user base increases,and as we achieve higher market penetration r

172、ates.If people do not perceive our products to be useful,reliable,and trustworthy,we may not be able to attract or retain users or otherwise maintain or increase the frequency and duration of their engagement.A number of other social networking companies that achieved early popularity have since see

173、n their active user bases or levels of engagement decline,in some cases precipitously.There is no guarantee that we will not experience a similar erosion of our active user base or engagement levels.Our user engagement patterns have changed over time and can be difficult to measure,particularly as u

174、sers engage increasingly via mobile devices and as we introduce new and different services.Any number of factors could potentially negatively affect user retention,growth,and engagement,including if:users increasingly engage with other products or activities;we fail to introduce new products that us

175、ers find engaging or if we introduce new products or services that are not favorably received;users feel that their Facebook experience is diminished as a result of the decisions we make with respect to the frequency,prominence,and size of ads that we display,or the quality of the ads displayed;user

176、 behavior on Facebook changes as a result of increasing use of mobile devices;we are unable to continue to develop products for mobile devices that users find engaging,that work with a variety of mobile operating systems and networks,and that achieve a high level of market acceptance;there are chang

177、es in user sentiment about the quality or usefulness of our products or concerns related to privacy and sharing,safety,security,or other factors;we are unable to manage and prioritize information to ensure users are presented with content that is interesting,useful,and relevant to them;users adopt n

178、ew technologies where Facebook may not be featured or otherwise available;there are adverse changes in our products that are mandated by legislation,regulatory authorities,or litigation,including settlements or consent decrees;technical or other problems prevent us from delivering our products in a

179、rapid and reliable manner or otherwise affect the user experience,such as any failure to prevent spam or similar content;we adopt policies or procedures related to areas such as sharing or user data that are perceived negatively by our users or the general public;if we elect to focus our user growth

180、 and engagement efforts more on longer-term initiatives,or if initiatives designed to attract and retain users and engagement are unsuccessful or discontinued,whether as a result of actions by us,third parties or otherwise;we fail to provide adequate customer service to users,developers,or marketers

181、;we,developers whose products are integrated with Facebook,or other companies in our industry are the subject of 14adverse media reports or other negative publicity;or our current or future products,such as our development tools and application programming interfaces that enable developers to build

182、mobile and web applications,reduce user activity on Facebook by making it easier for our users to interact and share on third-party mobile and web applications.If we are unable to maintain or increase our user base and user engagement,our revenue and financial results may be adversely affected.Any d

183、ecrease in user retention,growth,or engagement could render Facebook less attractive to users,developers,and marketers,which may have a material and adverse impact on our revenue,business,financial condition,and results of operations.To the extent our active user growth rate slows,we will become inc

184、reasingly dependent on our ability to maintain or increase levels of user engagement and monetization in order to drive revenue growth.We generate a substantial majority of our revenue from advertising.The loss of marketers,or reduction in spending by marketers with Facebook,could seriously harm our

185、 business.The substantial majority of our revenue is currently generated from third parties advertising on Facebook.For 2013,2012,and 2011,advertising accounted for 89%,84%and 85%,respectively,of our revenue.As is common in the industry,our marketers do not have long-term advertising commitments wit

186、h us.Many of our marketers spend only a relatively small portion of their overall advertising budget with us.We expect our ability to grow advertising revenue will become increasingly dependent on our ability to generate revenue from ads displayed on mobile devices.In addition,marketers may view som

187、e of our products as experimental and unproven.Marketers will not continue to do business with us,or they will reduce the prices they are willing to pay to advertise with us or the budgets they are willing to commit to us,if we do not deliver ads in an effective manner,or if they do not believe that

188、 their investment in advertising with us will generate a competitive return relative to other alternatives.Our advertising revenue could be adversely affected by a number of other factors,including:decreases in user engagement,including time spent on Facebook;our ability to continue to increase user

189、 access to and engagement with Facebook through our mobile products;product changes or inventory management decisions we may make that reduce the size,frequency,or relative prominence of ads displayed on Facebook;our inability to maintain or increase marketer demand,the pricing of our ads,or both;di

190、fferences between the pricing of our ads displayed on personal computers and mobile devices;our inability to maintain or increase the quality of ads shown to users,particularly on mobile devices;the accuracy of our analytics and measurement solutions that demonstrate the value of our ads,or our abil

191、ity to further improve such tools;decisions by marketers to use our free products,such as Facebook Pages,instead of advertising on Facebook;loss of advertising market share to our competitors,including if such competitors offer lower priced or more integrated products;adverse legal developments rela

192、ting to advertising,including legislative and regulatory developments and developments in litigation;decisions by marketers to reduce their advertising as a result of adverse media reports or other negative publicity involving us,content on Facebook,developers with Facebook-integrated mobile and web

193、 applications,or other companies in our industry;our inability to create new products that sustain or increase the value of our ads;the degree to which users opt out of social ads;the degree to which users cease or reduce the number of times they click on our ads;changes in the way online advertisin

194、g is priced;the impact of new technologies that could block or obscure the display of our ads;and the impact of macroeconomic conditions or conditions in the advertising industry,in general.15The occurrence of any of these or other factors could result in a reduction in demand for our ads,which may

195、reduce the prices we receive for our ads,or cause marketers to stop advertising with us altogether,either of which would negatively affect our revenue and financial results.Mobile advertising is new and evolving and growth in the use of Facebook through our mobile products as a substitute for use on

196、 personal computers may negatively affect our revenue and financial results.We had 945 million mobile monthly active users(MAUs)in December 2013.While most of our mobile users also access Facebook through personal computers,we anticipate that the rate of growth in mobile usage will continue to be th

197、e primary driver of our growth for the foreseeable future and that usage through personal computers will decline worldwide,including in key markets such as the United States and other developed markets in Europe and Asia.For example,during the fourth quarter of 2013,the number of mobile MAUs exceede

198、d the number of MAUs using personal computers for the first time,and the number of MAUs on personal computers declined relative to the third quarter of 2013.While our mobile advertising revenue continues to grow and comprised over half of our overall advertising revenue in the fourth quarter of 2013

199、,the mobile advertising market remains a new and evolving market.In addition,we do not currently offer our Payments infrastructure to applications on mobile devices.If users increasingly access Facebook mobile products as a substitute for access through personal computers,and if we are unable to con

200、tinue to grow mobile revenues or successfully monetize mobile users,or if we incur excessive expenses in these efforts,our financial performance and ability to grow revenue would be negatively affected.Facebook user growth,engagement,and monetization on mobile devices depend upon effective operation

201、 with mobile operating systems,networks,and standards that we do not control.There is no guarantee that popular mobile devices will continue to feature Facebook,or that mobile device users will continue to use Facebook rather than competing products.We are dependent on the interoperability of Facebo

202、ok with popular mobile operating systems that we do not control,such as Android and iOS,and any changes in such systems and terms of service that degrade our products functionality,give preferential treatment to competitive products,or prevent our ability to show ads could adversely affect Facebook

203、usage and monetization on mobile devices.Additionally,in order to deliver high quality mobile products,it is important that our products work well with a range of mobile technologies,systems,networks,and standards that we do not control.We may not be successful in developing relationships with key p

204、articipants in the mobile industry or in developing products that operate effectively with these technologies,systems,networks,or standards.In the event that it is more difficult for our users to access and use Facebook on their mobile devices,or if our users choose not to access or use Facebook on

205、their mobile devices or use mobile products that do not offer access to Facebook,our user growth and user engagement could be harmed.Our business is highly competitive.Competition presents an ongoing threat to the success of our business.We face significant competition in every aspect of our busines

206、s,including from companies that provide tools to facilitate the sharing of information,companies that enable marketers to display advertising and companies that provide development platforms for applications developers.We compete with companies that offer full-featured products that replicate the ra

207、nge of communications and related capabilities we provide.These offerings include,for example,Google+,which Google has integrated with certain of its products,including search and Android,as well as other,largely regional,social networks that have strong positions in particular countries.We also com

208、pete with companies that develop applications,particularly mobile applications,that provide social functionality,such as messaging,photo-and video-sharing,and micro-blogging,and companies that provide web-and mobile-based information and entertainment products and services that are designed to engag

209、e users and capture time spent online and on mobile devices.In addition,we face competition from traditional and online businesses that provide media for marketers to reach their audiences and/or develop tools and systems for managing and optimizing advertising campaigns.Some of our current and pote

210、ntial competitors may have significantly greater resources or better competitive positions in certain product segments,geographic regions or user demographics than we do.These factors may allow our competitors to respond more effectively than us to new or emerging technologies and changes in market

211、conditions.We believe that some of our users,particularly our younger users,are aware of and actively engaging with other products and services similar to,or as a substitute for,Facebook,and we believe that some of our users have reduced their engagement with Facebook in favor of increased engagemen

212、t with these other products and services.For example,in the third quarter of 2013,the best data available to us suggested that while usage by U.S.teens overall was stable,DAUs among younger teens in the United States had declined.In the event that our users increasingly engage with other products an

213、d services,we may experience a decline in user engagement in key user demographics or more broadly and our business could be harmed.Our competitors may develop products,features,or services that are similar to ours or that achieve greater acceptance,may undertake more far-reaching and successful pro

214、duct development efforts or marketing campaigns,or may adopt more aggressive pricing policies.In addition,developers whose mobile and web applications are integrated with Facebook may use information shared by our users through Facebook in order to develop products or features that compete with us.C

215、ertain competitors,including Google,could use strong or dominant positions in one or more markets to gain competitive advantage against us in areas where we operate,16including:by integrating competing social networking platforms or features into products they control such as search engines,web brow

216、sers,or mobile device operating systems;by making acquisitions;by limiting or denying our access to advertising measurement or delivery systems;or by making access to Facebook more difficult.As a result,our competitors may acquire and engage users at the expense of the growth or engagement of our us

217、er base,which may negatively affect our business and financial results.We believe that our ability to compete effectively depends upon many factors both within and beyond our control,including:the popularity,usefulness,ease of use,performance,and reliability of our products compared to our competito

218、rs products,particularly with respect to mobile products;the size and composition of our user base;the engagement of our users with our products;the timing and market acceptance of products,including developments and enhancements to our or our competitors products;our ability to monetize our product

219、s;the frequency,size,quality,and relative prominence of the ads displayed by us or our competitors;customer service and support efforts;marketing and selling efforts,including our ability to provide marketers with a compelling return on their investments;our ability to establish and maintain develop

220、ers interest in building mobile and web applications that integrate with Facebook;changes mandated by legislation,regulatory authorities,or litigation,including settlements and consent decrees,some of which may have a disproportionate effect on us;acquisitions or consolidation within our industry,wh

221、ich may result in more formidable competitors;our ability to attract,retain,and motivate talented employees,particularly software engineers,designers,and product managers;our ability to cost-effectively manage and grow our operations;and our reputation and brand strength relative to those of our com

222、petitors.If we are not able to compete effectively,our user base and level of user engagement may decrease,we may become less attractive to developers and marketers,and our revenue and results of operations may be materially and adversely affected.We may not be successful in our efforts to grow usag

223、e of and engagement with mobile and web applications that integrate with Facebook.We have made and are continuing to make investments to enable developers to build mobile and web applications that integrate with Facebook.Such existing and prospective developers may not be successful in building mobi

224、le and/or web applications that create and maintain user engagement.Additionally,developers may choose to build on other platforms,including mobile platforms controlled by third parties,rather than building products that integrate with Facebook.We are continuously seeking to balance the distribution

225、 objectives of our developers with our desire to provide an optimal user experience,and we may not be successful in achieving a balance that continues to attract and retain such developers.For example,from time to time,we have taken actions to reduce the volume of communications from these developer

226、s to users on Facebook with the objective of enhancing the user experience,and such actions have reduced distribution from,user engagement with,and our monetization opportunities from,Facebook-integrated mobile and web applications.In some instances,these actions,as well as other actions to enforce

227、our policies applicable to developers,have adversely affected our relationships with such developers.If we are not successful in our efforts to grow the number of developers that choose to build products that integrate with Facebook or if we are unable to build and maintain good relations with such

228、developers,our user growth and user engagement and our financial results may be adversely affected.17We may not be successful in our efforts to further monetize how developers use Facebook.We currently generate revenue from developers that use Facebook in several ways,including ads on pages generate

229、d by developers applications on the Facebook website,direct advertising on Facebook purchased by developers to drive traffic to their mobile and web applications,and fees from developers use of our Payments infrastructure to sell virtual and digital goods to users accessing Facebook via personal com

230、puters.Applications built by developers of social games are currently responsible for substantially all of our revenue derived from Payments,and the majority of the revenue from these applications has historically been generated by a limited number of the most popular games.In addition,a relatively

231、small percentage of our users have transacted with Facebook Payments.If the Facebook-integrated applications that currently generate revenue fail to grow or maintain their users and engagement,if developers do not continue to introduce new applications that attract users and create engagement on Fac

232、ebook,if developers reduce their advertising on Facebook,if we fail to maintain good relationships with existing developers or to attract new developers who build products that integrate with Facebook,or if Facebook-integrated applications outside of social games do not gain popularity and generate

233、significant revenue for us,our financial performance and ability to grow revenue could be adversely affected.Additionally,we are actively supporting developers efforts to develop their own mobile and web applications that integrate with Facebook.Unlike applications that run within the Facebook websi

234、te which enable us to show ads and offer Payments,we generally do not directly monetize from developers integrating their own mobile and web applications with Facebook.Therefore,our developers efforts to prioritize their own mobile or web applications may reduce or slow the growth of our user activi

235、ty that generates advertising and Payments opportunities,which could negatively affect our revenue.Although we believe that there are significant long-term benefits to Facebook resulting from increased engagement on Facebook-integrated mobile and web applications,these benefits may not offset the po

236、ssible loss of revenue,in which case our business could be harmed.Action by governments to restrict access to Facebook in their countries could substantially harm our business and financial results.It is possible that governments of one or more countries may seek to censor content available on Faceb

237、ook in their country,restrict access to Facebook from their country entirely,or impose other restrictions that may affect the accessibility of Facebook in their country for an extended period of time or indefinitely.For example,access to Facebook has been or is currently restricted in whole or in pa

238、rt in China,Iran,and North Korea.In addition,governments in other countries may seek to restrict access to Facebook if they consider us to be in violation of their laws.In the event that access to Facebook is restricted,in whole or in part,in one or more countries or our competitors are able to succ

239、essfully penetrate geographic markets that we cannot access,our ability to retain or increase our user base and user engagement may be adversely affected,we may not be able to maintain or grow our revenue as anticipated,and our financial results could be adversely affected.Our new products and chang

240、es to existing products could fail to attract or retain users or generate revenue.Our ability to retain,increase,and engage our user base and to increase our revenue depends heavily on our ability to create successful new products,both independently and in conjunction with developers or other third

241、parties.We may introduce significant changes to our existing products or develop and introduce new and unproven products,including using technologies with which we have little or no prior development or operating experience.If new or enhanced products fail to engage users,developers,or marketers,we

242、may fail to attract or retain users or to generate sufficient revenue,operating margin,or other value to justify our investments,and our business may be adversely affected.In the future,we may invest in new products and initiatives to generate revenue,but there is no guarantee these approaches will

243、be successful.For example,we recently began showing ads on Instagram in the United States and we cannot assure you that these ads will generate meaningful revenue for our business.If we are not successful with new products or new approaches to monetization,we may not be able to maintain or grow our

244、revenue as anticipated or recover any associated development costs,and our financial results could be adversely affected.We prioritize user growth and engagement and the user experience over short-term financial results.We frequently make product decisions that may reduce our short-term revenue or p

245、rofitability if we believe that the decisions are consistent with our mission and benefit the aggregate user experience and will thereby improve our financial performance over the long term.For example,from time to time we may change the size,frequency,or relative prominence of ads in order to impro

246、ve ad quality and overall user experience.Similarly,from time to time we update our News Feed ranking algorithm to deliver the most relevant content to our users,which may adversely affect the distribution of content of developers and marketers and could reduce their incentive to invest in their dev

247、elopment and marketing efforts on Facebook.We also may introduce changes to existing products,or introduce new stand-alone products,that direct users away from properties where we have a proven means of monetization.For example,we have taken action to redirect users who send messages from within the

248、 Facebook application to our stand-alone Messenger application,although we currently do not monetize the stand-alone Messenger application.In addition,we plan to focus on growing the user base for Instagram and potentially other stand-alone applications that may have limited or no monetization,and i

249、t is possible that these efforts may reduce engagement with the core Facebook application.These decisions may not produce the long-term benefits that we expect,in which case our user growth and engagement,our relationships with developers and marketers,and our business and results of operations coul

250、d be harmed.18If we are not able to maintain and enhance our brand,or if events occur that damage our reputation and brand,our ability to expand our base of users,developers,and marketers may be impaired,and our business and financial results may be harmed.We believe that the Facebook brand has sign

251、ificantly contributed to the success of our business.We also believe that maintaining and enhancing our brand is critical to expanding our base of users,developers,and marketers.Many of our new users are referred by existing users.Maintaining and enhancing our brand will depend largely on our abilit

252、y to continue to provide useful,reliable,trustworthy,and innovative products,which we may not do successfully.We may introduce new products or terms of service that users do not like,which may negatively affect our brand.Additionally,the actions of our developers may affect our brand if users do not

253、 have a positive experience using third-party mobile and web applications integrated with Facebook.We have in the past experienced,and we expect that in the future we will continue to experience,media,legislative,or regulatory scrutiny of our decisions regarding user privacy or other issues,which ma

254、y adversely affect our reputation and brand.We also may fail to provide adequate customer service,which could erode confidence in our brand.Our brand may also be negatively affected by the actions of users that are deemed to be hostile or inappropriate to other users,or by users acting under false o

255、r inauthentic identities,or by perceived or actual efforts by governments to obtain access to user information for security-related purposes.Maintaining and enhancing our brand may require us to make substantial investments and these investments may not be successful.If we fail to successfully promo

256、te and maintain the Facebook brand or if we incur excessive expenses in this effort,our business and financial results may be adversely affected.Improper access to or disclosure of user information,or violation of our terms of service or policies,could harm our reputation and adversely affect our bu

257、siness.Our Data Use Policy governs the collection and use of information we receive in connection with our services.Our efforts to protect the information we receive may be unsuccessful due to the actions of third parties,software bugs or other technical malfunctions,employee error or malfeasance,go

258、vernment surveillance,or other factors.In addition,third parties may attempt to fraudulently induce employees or users to disclose information in order to gain access to our data or our users data.If any of these events occur,our users information could be accessed or disclosed improperly.Some of ou

259、r developers or other partners,such as those that help us measure the effectiveness of ads,may receive or store information provided by us or by our users through mobile or web applications integrated with Facebook.If these third parties or developers fail to adopt or adhere to adequate data securit

260、y practices or fail to comply with our terms and policies,or in the event of a breach of their networks,our users data may be improperly accessed,used,or disclosed.Any incidents involving unauthorized access to or improper use of user information or incidents involving violation of our terms of serv

261、ice or policies,including our Data Use Policy,could damage our reputation and our brand and diminish our competitive position.In addition,the affected users or government authorities could initiate legal or regulatory actions against us in connection with such incidents,which could cause us to incur

262、 significant expense and liability or result in orders or consent decrees forcing us to modify our business practices.Any of these events could have a material and adverse effect on our business,reputation,or financial results.Unfavorable media coverage could negatively affect our business.We receiv

263、e a high degree of media coverage around the world.Unfavorable publicity regarding,for example,our privacy practices,product changes,product quality,litigation or regulatory activity,government surveillance,the actions of our developers whose products are integrated with Facebook,the actions of our

264、users,or the actions of other companies that provide similar services to us,could adversely affect our reputation.Such negative publicity also could have an adverse effect on the size,engagement,and loyalty of our user base and result in decreased revenue,which could adversely affect our business an

265、d financial results.Our financial results will fluctuate from quarter to quarter and are difficult to predict.Our quarterly financial results have fluctuated in the past and will fluctuate in the future.Additionally,we have a limited operating history with the current scale of our business,which mak

266、es it difficult to forecast our future results.As a result,you should not rely upon our past quarterly financial results as indicators of future performance.You should take into account the risks and uncertainties frequently encountered by companies in rapidly evolving markets.Our financial results

267、in any given quarter can be influenced by numerous factors,many of which we are unable to predict or are outside of our control,including:our ability to maintain and grow our user base and user engagement;our ability to attract and retain marketers in a particular period;fluctuations in spending by

268、our marketers due to seasonality,such as historically strong spending in the fourth quarter of each year,or other factors;the number and quality of ads shown to users;the pricing of our ads and other products;19 our ability to continue to scale monetization through our mobile products;our ability to

269、 maintain or increase Payments and other fees revenue;the diversification and growth of revenue sources beyond advertising and Payments;the development and introduction of new products or services by us or our competitors;increases in marketing,sales,and other operating expenses that we may incur to

270、 grow and expand our operations and to remain competitive;our ability to maintain gross margins and operating margins;costs related to the acquisitions of businesses,talent,technologies or intellectual property,including potentially significant amortization costs;our ability to obtain equipment and

271、components for our data centers and other technical infrastructure in a timely and cost-effective manner;system failures,which could prevent us from serving ads for any period of time,or breaches of security or privacy,and the costs associated with remediating any such failures or breaches;inaccessi

272、bility of Facebook due to third-party actions;share-based compensation expense;adverse litigation judgments,settlements,or other litigation-related costs;changes in the legislative or regulatory environment,including with respect to privacy,or enforcement by government regulators,including fines,ord

273、ers,or consent decrees;the overall tax rate for our business,which may be affected by the financial results of our international subsidiaries;fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign currencies;fluctuations in the market

274、 values of our portfolio investments and in interest rates;changes in U.S.generally accepted accounting principles;and changes in global business or macroeconomic conditions.We expect our rates of growth may decline in the future.We believe that our rates of user and revenue growth may decline over

275、time.While we have recently experienced increased revenue growth compared to prior periods,we expect that our user growth and revenue growth rates will decline over time as the size of our active user base increases and as we achieve greater market penetration.For example,our MAUs grew 16%from Decem

276、ber 31,2012 to 2013,25%from December 31,2011 to 2012 and 39%from 2010 to 2011.Historically,our user growth has been a primary driver of growth in our revenue.As our growth rates decline,investors perceptions of our business may be adversely affected and the trading price of our Class A common stock

277、could decline.Our costs are continuing to grow,which could harm our business and profitability.Operating our business is costly and we expect our expenses to continue to increase in the future as we broaden our user base,as users increase the number of connections and amount of data they share with

278、us,and as we develop and implement new products.Historically,our costs have increased each year due to these factors and we expect to continue to incur increasing costs,in particular for servers,storage,power,and data centers,to support our anticipated future growth.We expect to continue to invest i

279、n these and other efforts to operate and expand our business around the world,including in countries and/or projects where we may not have a clear path to monetization,such as our commitment to the Internet.org initiative to increase global Internet access.In addition,our costs may increase as we hi

280、re additional employees,particularly as a result of the significant competition that we face to attract and retain technical talent.Our expenses may grow faster than our revenue and may be greater than we anticipate in a particular period or over time,and our investments may not be successful.In add

281、ition,we may increase marketing,sales,and other operating expenses in order to grow and expand our operations and to remain competitive.Increases in our costs may adversely affect our business and profitability.20Our business is subject to complex and evolving U.S.and foreign laws and regulations re

282、garding privacy,data protection,and other matters.Many of these laws and regulations are subject to change and uncertain interpretation,and could result in claims,changes to our business practices,monetary penalties,increased cost of operations,or declines in user growth or engagement,or otherwise h

283、arm our business.We are subject to a variety of laws and regulations in the United States and abroad that involve matters central to our business,including user privacy,rights of publicity,data protection,content,intellectual property,advertising,marketing,distribution,electronic contracts and other

284、 communications,competition,protection of minors,consumer protection,taxation,securities law compliance,and online payment services.The introduction of new products or expansion of our activities in certain jurisdictions may subject us to additional laws and regulations.In addition,foreign data prot

285、ection,privacy,and other laws and regulations can be more restrictive than those in the United States.These U.S.federal and state and foreign laws and regulations,which can be enforced by private parties or government entities,are constantly evolving and can be subject to significant change.In addit

286、ion,the application and interpretation of these laws and regulations are often uncertain,particularly in the new and rapidly evolving industry in which we operate,and may be interpreted and applied inconsistently from country to country and inconsistently with our current policies and practices.For

287、example,the interpretation of some laws and regulations that govern the use of names and likenesses in connection with advertising and marketing activities is unsettled and developments in this area could affect the manner in which we design our products,as well as our terms of use.A number of propo

288、sals are pending before federal,state,and foreign legislative and regulatory bodies that could significantly affect our business.For example,the European Commission is currently considering a data protection regulation that may include operational requirements for companies that receive personal dat

289、a that are different than those currently in place in the European Union,and that may also include significant penalties for non-compliance.Similarly,there have been a number of recent legislative proposals in the United States,at both the federal and state level,that would impose new obligations in

290、 areas such as privacy and liability for copyright infringement by third parties.In addition,some countries are considering legislation requiring local storage and processing of data that,if enacted,could increase the cost and complexity of delivering our services.These existing and proposed laws an

291、d regulations can be costly to comply with and can delay or impede the development of new products,result in negative publicity,increase our operating costs,require significant management time and attention,and subject us to inquiries or investigations,claims or other remedies,including fines or dem

292、ands that we modify or cease existing business practices.We have been subject to regulatory investigations and settlements and we expect to continue to be subject to such proceedings in the future,which could cause us to incur substantial costs or require us to change our business practices in a man

293、ner materially adverse to our business.From time to time,we receive formal and informal inquiries from regulators regarding our compliance with laws and other matters.In 2012 the Federal Trade Commission approved a settlement agreement with us that,among other things,requires us to complete bi-annua

294、l independent privacy assessments and to establish and refine certain practices with respect to treatment of user information and the privacy settings we offer.In 2011 and 2012,the Irish Data Protection Commissioner audited the data,security,and privacy practices and policies of Facebook Ireland.We

295、expect to continue to be the subject of regulatory investigations and audits in the future by these and other regulators throughout the world.Violation of existing or future regulatory orders or consent decrees could subject us to substantial monetary fines and other penalties that could negatively

296、affect our financial condition and results of operations.In addition,it is possible that future orders issued by,or inquiries or enforcement actions initiated by,regulatory authorities could cause us to incur substantial costs or require us to change our business practices in a manner materially adv

297、erse to our business.21If we are unable to protect our intellectual property,the value of our brand and other intangible assets may be diminished,and our business may be adversely affected.We rely and expect to continue to rely on a combination of confidentiality and license agreements with our empl

298、oyees,consultants,and third parties with whom we have relationships,as well as trademark,copyright,patent,trade secret,and domain name protection laws,to protect our proprietary rights.In the United States and internationally,we have filed various applications for protection of certain aspects of ou

299、r intellectual property,and we currently hold a number of issued patents in multiple jurisdictions and have acquired patents and patent applications from third parties.In addition,in the future we may acquire additional patents or patent portfolios,which could require significant cash expenditures.T

300、hird parties may knowingly or unknowingly infringe our proprietary rights,third parties may challenge proprietary rights held by us,and pending and future trademark and patent applications may not be approved.In addition,effective intellectual property protection may not be available in every countr

301、y in which we operate or intend to operate our business.In any or all of these cases,we may be required to expend significant time and expense in order to prevent infringement or to enforce our rights.Although we have taken measures to protect our proprietary rights,there can be no assurance that ot

302、hers will not offer products or concepts that are substantially similar to ours and compete with our business.In addition,we regularly contribute software source code under open source licenses and have made other technology we developed available under other open licenses,and we include open source

303、 software in our products.For example,we have contributed certain specifications and designs related to our data center equipment to the Open Compute Project Foundation,a non-profit entity that shares and develops such information with the technology community,under the Open Web Foundation License.A

304、s a result of our open source contributions and the use of open source in our products,we may license or be required to license or disclose code and/or innovations that turn out to be material to our business and may also be exposed to increased litigation risk.If the protection of our proprietary r

305、ights is inadequate to prevent unauthorized use or appropriation by third parties,the value of our brand and other intangible assets may be diminished and competitors may be able to more effectively mimic our service and methods of operations.Any of these events could have an adverse effect on our b

306、usiness and financial results.We are currently,and expect to be in the future,party to patent lawsuits and other intellectual property rights claims that are expensive and time consuming,and,if resolved adversely,could have a significant impact on our business,financial condition,or results of opera

307、tions.Companies in the Internet,technology,and media industries own large numbers of patents,copyrights,trademarks,and trade secrets,and frequently enter into litigation based on allegations of infringement,misappropriation,or other violations of intellectual property or other rights.In addition,var

308、ious non-practicing entities that own patents and other intellectual property rights often attempt to aggressively assert their rights in order to extract value from technology companies.Furthermore,from time to time we may introduce new products,including in areas where we currently do not compete,

309、which could increase our exposure to patent and other intellectual property claims from competitors and non-practicing entities.From time to time,we receive notice letters from patent holders alleging that certain of our products and services infringe their patent rights.We presently are involved in

310、 a number of intellectual property lawsuits,and as we face increasing competition and gain an increasingly high profile,we expect the number of patent and other intellectual property claims against us to grow.Defending patent and other intellectual property litigation is costly and can impose a sign

311、ificant burden on management and employees,and there can be no assurances that favorable final outcomes will be obtained in all cases.In addition,plaintiffs may seek,and we may become subject to,preliminary or provisional rulings in the course of any such litigation,including potential preliminary i

312、njunctions requiring us to cease some or all of our operations.We may decide to settle such lawsuits and disputes on terms that are unfavorable to us.Similarly,if any litigation to which we are a party is resolved adversely,we may be subject to an unfavorable judgment that may not be reversed upon a

313、ppeal.The terms of such a settlement or judgment may require us to cease some or all of our operations or pay substantial amounts to the other party.In addition,we may have to seek a license to continue practices found to be in violation of a third partys rights,which may not be available on reasona

314、ble terms,or at all,and may significantly increase our operating costs and expenses.As a result,we may also be required to develop alternative non-infringing technology or practices or discontinue the practices.The development of alternative non-infringing technology or practices could require signi

315、ficant effort and expense or may not be feasible.Our business,financial condition,and results of operations could be adversely affected as a result of an unfavorable resolution of the disputes and litigation referred to above.We are involved in numerous class action lawsuits and other litigation mat

316、ters that are expensive and time consuming,and,if resolved adversely,could harm our business,financial condition,or results of operations.In addition to intellectual property claims,we are also involved in numerous other lawsuits,including putative class action lawsuits brought by users and marketer

317、s,many of which claim statutory damages or seek significant changes to our business operations,and we anticipate that we will continue to be a target for numerous lawsuits in the future.Because we have over a billion users,the plaintiffs in class action cases filed against us typically claim enormou

318、s monetary damages even if the alleged per-user harm is small or non-existent.Any negative outcome from such lawsuits could result in payments of substantial monetary damages or fines,or undesirable changes to our products or business practices,and accordingly our business,financial condition,or res

319、ults of operations 22could be materially and adversely affected.Although the results of such lawsuits and claims cannot be predicted with certainty,we do not believe that the final outcome of those matters relating to our products that we currently face will have a material adverse effect on our bus

320、iness,financial condition,or results of operations.In addition,we are currently the subject of stockholder class action suits in connection with our IPO.We believe these lawsuits are without merit and are vigorously defending these lawsuits.There can be no assurances that a favorable final outcome w

321、ill be obtained in all our cases,and defending any lawsuit is costly and can impose a significant burden on management and employees.Any litigation to which we are a party may result in an onerous or unfavorable judgment that may not be reversed upon appeal or in payments of substantial monetary dam

322、ages or fines,or we may decide to settle lawsuits on similarly unfavorable terms,which could adversely affect our business,financial conditions,or results of operations.Our CEO has control over key decision making as a result of his control of a majority of our voting stock.Mark Zuckerberg,our found

323、er,Chairman,and CEO,is able to exercise voting rights with respect to a majority of the voting power of our outstanding capital stock and therefore has the ability to control the outcome of matters submitted to our stockholders for approval,including the election of directors and any merger,consolid

324、ation,or sale of all or substantially all of our assets.This concentrated control could delay,defer,or prevent a change of control,merger,consolidation,or sale of all or substantially all of our assets that our other stockholders support,or conversely this concentrated control could result in the co

325、nsummation of such a transaction that our other stockholders do not support.This concentrated control could also discourage a potential investor from acquiring our Class A common stock due to the limited voting power of such stock relative to the Class B common stock and might harm the trading price

326、 of our Class A common stock.In addition,Mr.Zuckerberg has the ability to control the management and major strategic investments of our company as a result of his position as our CEO and his ability to control the election or replacement of our directors.In the event of his death,the shares of our c

327、apital stock that Mr.Zuckerberg owns will be transferred to the persons or entities that he designates.As a board member and officer,Mr.Zuckerberg owes a fiduciary duty to our stockholders and must act in good faith in a manner he reasonably believes to be in the best interests of our stockholders.A

328、s a stockholder,even a controlling stockholder,Mr.Zuckerberg is entitled to vote his shares,and shares over which he has voting control as a result of voting agreements,in his own interests,which may not always be in the interests of our stockholders generally.We plan to continue to make acquisition

329、s,which could require significant management attention,disrupt our business,result in dilution to our stockholders,and adversely affect our financial results.As part of our business strategy,we have made and intend to make acquisitions to add specialized employees,complementary companies,products,or

330、 technologies.Our ability to acquire and integrate larger or more complex companies,products,or technologies in a successful manner is unproven.In the future,we may not be able to find other suitable acquisition candidates,and we may not be able to complete acquisitions on favorable terms,if at all.

331、Any future acquisitions we complete could be viewed negatively by users,developers,marketers,or investors,and our acquisitions may not achieve our goals.For example,in August 2012,we acquired Instagram and since the acquisition,we have been focused on user growth and the users experience.We just rec

332、ently began showing ads on Instagram in the United States and we cannot assure you that these ads will generate meaningful revenue for our business.In addition,if we fail to successfully close or integrate any acquisitions,integrate the products or technologies associated with such acquisitions into

333、 our company,or identify and address liabilities associated with the acquired business or assets,our business,revenue,and operating results could be adversely affected.Any integration process may require significant time and resources,and we may not be able to manage the process successfully.We may not successfully evaluate or utilize the acquired products,technology,or personnel,or accurately for