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(Updates with mobile risks beginning in first paragraph.)
Feb. 1 (Bloomberg) -- Facebook Inc., the social-networking giant that filed for an initial public offering today, cited Google+ competition, regulatory scrutiny, hacker attacks and the shift to mobile technology among the stock’s potential risks.
Facebook is vying with Google+ and other Google Inc. sites in the social-networking market, along with regional rivals, the company said in the risk-factors section of its filing. Facebook also said it would face competition in China if it manages to gain access to that market, where it’s currently blocked.
“Certain 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,” Facebook said. Their tactics could include “integrating competing social- networking platforms or features into products they control.”
Facebook, the world’s most popular social-networking service, has attracted more rivals as its popularity among users and advertisers grows. The company said it faces “significant competition” in almost every aspect of its business.
The company also cited concerns about its mobile strategy. Currently, almost all of its revenue is from ads served to computers. Facebook’s mobile products currently generate no “meaningful revenue,” the Menlo Park, California-based company said.
Facebook also cautioned that key mobile devices, such as Apple Inc.’s iOS products and gadgets running Google’s Android software, may choose not to feature Facebook in the future. If either of these mobile operating system providers gives preference to another social network -- say, if Google promotes Google+ more aggressively -- it could limit Facebook’s growth.
Zynga Reliance
Another risk: Facebook relies on Zynga Inc. for 12 percent of its revenue, according to the filing. San Francisco-based Zynga is the bigger developer of Facebook games, including “FarmVille” and “Mafia Wars.”
Facebook also said it faces pressure from governmental bodies. It’s possible that a regulatory inquiry might lead to changes to policies or practices, Facebook said.
“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 of operations,” the company said in the filing.
Facebook, founded in 2004, has 845 million active users. That compares with over 90 million for Google+.
--With assistance from Peter Burrows and Adam Satariano in San Francisco. Editors: Nick Turner, Jillian Ward
To contact the reporter on this story: Brian Womack in San Francisco at Bwomack1@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
