REVENUES SWELLED at Facebook’s Irish operating subsidiary last year, from €15.2 million to €229.1 million, as the company took on responsibility for billing customers for advertising running on the website.
Prior to September 1st, 2010, Facebook Ireland Ltd primarily provided marketing services to its parent. The accounts for 2010, which have just been lodged at the Companies Office, show Facebook Ireland generated a pretax profit of €1.9 million, up from €297,000 in 2009.
The social network has agreed to make significant changes to the way its handles its users’ privacy and data following an audit by the Irish Data Protection Commissioner, which was published on Wednesday.
Facebook established its European headquarters in Dublin in 2008.
Since September 2010 it has been the legal entity with which Facebook users outside of the US and Canada have a contractual relationship, and as a result the data commissioner carried out the audit, which was prompted by complaints from an Austrian group Europe vs Facebook.
Staff numbers at the social network, which has over two million registered users in Ireland, grew from 64 in 2009 to 151 last year. Staff costs came in at €10.4 million compared to €1.8 million the previous year.
In response to a request for comment, Facebook released a statement to The Irish Timeslast night. "As a private company, we do not provide extensive detail on our finances. In keeping with the legal requirements of certain countries, we file reports about local operations but it would be a mistake to draw any conclusions from such reports. The information presented does not reflect a full accounting of a given company's overall financial performance," it read.
The accounts do not break down the revenues according to what was generated by advertising and the provision of marketing services, but the massive jump in revenues based on just four months of advertising revenue underlines its importance to the Californian company.
The privately held company is believed to be on course to generate global revenues of about $4 billion (€3 billion) this year and is expected to be floated on the stock market next year.
The addition of the new activities saw Facebook Ireland incur significant additional costs. Cost of sales jumped by €5.6 million to €5.7 million, due to a mix of third-party agency discounts and rebates and increased credit card fees associated with more customer activity on the site.
Administrative expenses increased by €206.8 million to €221.6 million as a result of the increase in headcount and royalties paid to other Facebook entities for services provided during the year.
The accounts show the Irish operations generated net cash of €173.7 million from operating activities.
Facebook’s offices are on Dublin’s Grand Canal Dock. The area has become know as “Silicon Dock” because in addition to Facebook, it is home to Google, Zynga, LinkedIn and Gilt Groupe.
Facebook Ireland paid corporation taxes of €369,000 in 2010.
