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developers, or investors do not perceive our user metrics to be accurate representations of our user base, or if we
discover material inaccuracies in our user metrics, our reputation may be harmed and marketers and developers
may be less willing to allocate their budgets or resources to Facebook, which could negatively affect our business
and financial results.
We cannot assure you that we will effectively manage our growth.
Our employee headcount and the scope and complexity of our business have increased significantly, with
the number of employees increasing to 4,619 as of December 31, 2012 from 3,200 as of December 31, 2011, and
we expect headcount growth to continue for the foreseeable future. The growth and expansion of our business
and products create significant challenges for our management, operational, and financial resources, including
managing multiple relations with users, marketers, Platform developers, and other third parties. In the event of
continued growth of our operations or in the number of our third-party relationships, our information technology
systems or our internal controls and procedures may not be adequate to support our operations. In addition, some
members of our management do not have significant experience managing a large global business operation, so
our management may not be able to manage such growth effectively. To effectively manage our growth, we must
continue to improve our operational, financial, and management processes and systems and to effectively
expand, train, and manage our employee base. As our organization continues to grow, and we are required to
implement more complex organizational management structures, we may find it increasingly difficult to maintain
the benefits of our corporate culture, including our ability to quickly develop and launch new and innovative
products. This could negatively affect our business performance.
The loss of one or more of our key personnel, or our failure to attract and retain other highly qualified
personnel in the future, could harm our business.
We currently depend on the continued services and performance of our key personnel, including Mark
Zuckerberg and Sheryl K. Sandberg. Although we have entered into employment agreements with
Mr. Zuckerberg and Ms. Sandberg, the agreements have no specific duration and constitute at-will employment.
In addition, many of our key technologies and systems are custom-made for our business by our personnel. The
loss of key personnel, including members of management as well as key engineering, product development,
marketing, and sales personnel, could disrupt our operations and have an adverse effect on our business.
As we continue to grow, we cannot guarantee we will continue to attract the personnel we need to maintain
our competitive position. In particular, we intend to hire a significant number of technical personnel in 2013, and
we expect to face significant competition from other companies in hiring such personnel, particularly in the San
Francisco Bay Area. As we mature, the incentives to attract, retain, and motivate employees provided by our
equity awards or by future arrangements may not be as effective as in the past, and if we issue significant equity
to attract additional employees, the ownership of our existing stockholders may be further diluted. Additionally,
we have a number of current employees whose equity ownership in our company gives them a substantial
amount of personal wealth, which could affect their decisions about whether or not to continue to work for us. As
a result of these factors, it may be difficult for us to continue to retain and motivate our employees. If we do not
succeed in attracting, hiring, and integrating excellent personnel, or retaining and motivating existing personnel,
we may be unable to grow effectively.
We may incur liability as a result of information retrieved from or transmitted over the Internet or posted to
Facebook and claims related to our products.
We have faced, currently face, and will continue to face claims relating to information that is published or
made available on Facebook. In particular, the nature of our business exposes us to claims related to defamation,
intellectual property rights, rights of publicity and privacy, and personal injury torts. This risk is enhanced in
certain jurisdictions outside the United States where our protection from liability for third-party actions may be
unclear and where we may be less protected under local laws than we are in the United States. We could incur
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