Facebook files for mega-IPO

Facebook filed on Wednesday to raise a targeted $5 billion US in a hotly anticipated initial public offering, setting the stage for Silicon Valley's biggest-ever IPO.

The world's largest social network - a dorm room project for Harvard dropout Mark Zuckerberg that exploded in popularity and vaulted to Silicon Valley's top tier within eight years - said in its preliminary filing that its net income rose 65 percent to $1 billion in 2011, off revenue of $3.71 billion.

The long-awaited submission kicks off a months-long process that will culminate in Silicon Valley's biggest coming-out party since the heyday of the dotcom boom and bust.

Facebook, which said it now has 845 million active users, appointed Morgan Stanley (MS-N), Goldman Sachs (GS-N) and JPMorgan (JPM-N) its lead underwriters. Other bookrunners included Bank of America (BAC-N) Merrill Lynch, Barclays Capital and Allen & Co.

"We often talk about inventions like the printing press and the television," Zuckerberg said in a letter accompanying the documents. "Today, our society has reached another tipping point."

"There is a huge need and a huge opportunity to get everyone in the world connected, to give everyone a voice and to help transform society for the future," said Zuckerberg, whose $500,000 base salary will drop to a dollar from Jan.1 2013.

"The scale of the technology and infrastructure that must be built is unprecedented."

Facebook had previously been expected to raise $10 billion in what would have been the fourth-largest IPO in U.S. history, after Visa Inc (V-N), General Motors (GM-N), and AT&T Wireless (T-N), according to Thomson Reuters data.

As expected, the prospectus underscored how the lion's share of Facebook's revenue, 85 percent, was derived from advertising in 2011. Last year, social-gaming company Zynga (ZNGA-Q), the creator of Farmville, accounted for 12 percent of Facebook's revenue.