Facebook Drops CFO Gideon Yu in Move Toward IPO

Company Releases Financial Details, Claims It Will Be Profitable by 2010

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NEW YORK (AdAge.com) -- Facebook pushed Chief Financial Officer Gideon Yu out the door today and said it was looking for a replacement "with public-company experience."

Gideon Yu
Gideon Yu
The company also released some financial details for the first time in what appeared to be an attempt to quell reports that it needs to raise additional capital. Facebook said it expects revenue to be up 70% in 2009 from 2008, and that the 800-person company will reach profitability in 2010.

The departure of Mr. Yu, who joined Facebook from Google in 2007, was announced internally, and soon after reports appeared in the press, the company issued a statement casting the move as a precursor to an initial public offering.

"Despite the poor economic climate, we are pleased that our financial performance is strong and we are well-positioned for the next stage of our growth," the company said in the statement. "We have retained Spencer Stuart to lead our search for a new CFO and will be looking for someone with public-company experience."

The release of financial information seemed geared to blunt the notion that Facebook needs cash. Earlier this week, BusinessWeek reported Facebook was seeking to raise $100 million in debt financing to lease additional servers to accommodate its growing user base, expected to surpass 200 million registered users in the next month.

A executive close to the company said the reason for the debt financing was to manage cash flow, not because the company needs to raise additional cash by taking on new investors. While the company wants the option of filing for an IPO to raise capital for expansion, no filing is imminent.

In 2007, Microsoft invested $240 million in Facebook at a $15 billion valuation; the software giant also has a search deal with the social network.

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