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Michael Comeau: Is Facebook as open as it looks?

The Nasdaq board in Times Square advertises Facebook

The Nasdaq board in Times Square advertises Facebook debut on the Nasdaq Stock Market (Getty) Credit: The Nasdaq board in Times Square advertises Facebook's debut on the Nasdaq Stock Market (Getty)

This week, Bloomberg published an extensive account of Facebook's steel cage match with the Securities and Exchange Commission over pre-IPO disclosures.
Facebook fought like a pit bull to avoid disclosing certain risk factors, including its dependence upon social gaming company Zynga and its difficulties in monetizing its growing mobile user base.

That's pretty hard to reconcile with the company's stated mission, which is "make the world more open and connected."

The SEC took flack over the last decade for being slow to the punch on big-time fraud cases like Bernie Madoff and Enron.

So let's give credit where credit is due: by the time Facebook went public, there was more than enough information disclosed to determine there was trouble ahead.

Here's are three excerpts from Facebook's various IPO filings:

"Apps built by developers of social games, particularly Zynga, are currently responsible for substantially all of our revenue derived from Payments."

"Growth in use of Facebook through our mobile products, where our ability to monetize is unproven, as a substitute for use on personal computers may negatively affect our revenue and financial results."

"We believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users increasing more rapidly than the increase in the number of ads delivered."

Combine these statements with rather obvious slowdown in revenue and user growth, and what else did you really need know?

Michael Comeau is a columnist and buzz editor at Minyanville.

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