Some Facebook groups now have cover photos, making them more consistent with the new Timeline design.

The default image is a collage of the group members’ profile photos, which link to individual profiles. The image is slightly transparent, but colors are restored when a user hovers over it. We’ve heard that any member has the option to change the cover photo, though we haven’t been able to test this ourselves. It is surprising that non-admins would be able to change the image, but there may be a setting that allows or disallows this.

The group’s Wall has not been changed to the Timeline format. This is likely because the order of posts changes based on activity. When a member comments on an old post, for example, that post is moved to the top of the page.

This is the first instance of Timeline-like features being added to another area of Facebook. Many page owners wonder when their business or fan pages will get the Timeline treatment. We previously assumed pages would get similar two-column reverse chronological presentation, but the minor change to groups suggests that pages might not get a complete overhaul either.

Facebook has not provided details how or a date for when pages will be redesigned. “We hope to make Pages more consistent with Timeline in the future, but we have nothing further to share at this time,” a Facebook spokesperson says.

Thanks to Denis Baranov for the tip and screenshots.

Facebook had $1 billion in net income on $3.71 billion in 2011, according to its filing to raise $5 billion in an initial public offering. The company’s revenues grew 87 percent year-over-year from the 2010, which in turn more than doubled from the year before.

Payments and fees revenue made up $557 million or about 15 percent of revenues for all of 2011, showing that the company is still heavily dependent on display advertising. Ads made up $3.154 billion in revenue. Just to note, Facebook has $3.91 billion in cash and marketable securities.

If you look specifically at the fourth quarter of last year, revenue grew 55 percent over the same time a year earlier. That’s mostly because of advertising revenue, which climbed 44 percent. Last quarter, Facebook saw the number of ads it served rise 16 percent while the average price per ad also jumped 24 percent. The growth in overall ad inventory has to do with more usage, as Facebook grew to 845 million monthly active users. At the same time, the company also tweaked the prominence of ads on pages and increased the reserve price for ads.

The other key revenue stream to point out is fees or payments, which are mostly from social games that use the company’s virtual currency Credits. Facebook made Credits mandatory for canvas games in July of last year, and that helped payments and fees revenue grow to make up 17 percent of the company’s revenue in the most recent quarter. That’s up from 10 percent share a year ago. So the company is making progress in diversifying from pure display advertising revenue.

The question now is whether Facebook can duplicate its success in payments in verticals outside of gaming. At a market capitalization of $7.41 billion, Zynga is the biggest company to date that the Facebook platform has spawned. But other categories of apps still have far to go. Facebook has made a concerted effort this year to diversify its platform by supporting businesses like Spotify and media properties like The Washington Post, but media and music have been historically difficult to monetize online.

Facebook even acknowledges its dependence on the social gaming ecosystem in the risks sections saying that Zynga accounts for 12 percent of the company’s revenues. That includes both payments revenue and advertising that is displayed alongside Zynga games.

“If the use of Zynga games on our Platform declines, if Zynga launches games on or migrates games to competing platforms, or if we fail to maintain good relations with Zynga, we may lose Zynga as a significant Platform developer and our financial results may be adversely affected,” the filing says.

Mobile is another potential growth area. Right now, increased mobile usage actually undermines Facebook’s financial performance because the company has yet to display ads in any of its smartphone or tablet apps. On top of that, Facebook does not have its own mobile operating system like Apple or Google, which makes it difficult for the company to earn a 30 percent cut of payments revenue through mobile apps. But Facebook says that showing sponsored stories in the news feed is one way it plans to monetize its mobile presence.

Overall, Facebook says its market opportunity is in display and performance advertising, where marketers can target users either on demographics like age and gender or their likes and preferences. Facebook also says it might expand its Credits virtual currency to other app categories. But it leaves out what we think are interesting revenue opportunities: an ad network that extends well beyond Facebook.com and search advertising from a search engine that marries Facebook’s open graph data and a thorough index of the web.

Facebook also says it is geographically diversifying revenue. The U.S. made up 56 percent of revenues last year, down from 62 percent in 2010 and 67 percent in 2009. This is mostly because Facebook is now growing faster in other countries than in the U.S. plus the fact that it has added international sales offices and more payment methods. The most lucrative markets outside the U.S. are unsurprisingly from Europe and English-speaking countries like Canada and Australia. That said, Facebook is seeing some of its fastest growth from Brazil and India so we might see some even further broadening over the next few years. India actually recently took Indonesia’s crown as Facebook’s second largest market during the past month.

This story is developing and we’ll report more as we go through the financials. Facebook filed to raise $5 billion in a much anticipated initial public offering today. We have a breakdown of the investor table here. We also have a breakdown of how much Facebook has paid for all of the companies it has acquired over the past few years.

Facebook revealed that it spent $68 million in cash and stock on acquisitions last year, according to its filing for an initial public offering. The company said all of the deals were not material.

Here’s more details on how much Facebook has paid for companies in stock. This excludes cash-based compensation and other retention bonuses. We don’t know which companies Facebook is actually referring to in its filing because the company doesn’t explicitly say, but we put our best guesses here based on when deal announcements were made.

The numbers seem mostly consistent with what we’ve heard — that the amount of equity Facebook offers for talent has gotten smaller over time as secondary markets have more aggressively priced the value of Facebook’s shares. Facebook now tends to offer Class A shares instead of Class B shares. (Class A shares have one-tenth the voting power of Class B shares.)

Companies that are closely connected to Facebook’s founders or early employees, like Drop.io, also seem to get far better terms than other startups do. That said, Facebook has told us that it is starting to look at bigger deals and raising $5 billion in capital might be just the kick that the company needs to go for more than talent.

In Facebook’s most recent internal valuation on December 31, the value of a Class B share was found to be $29.73. A single Class B share can be converted into a Class A share. We calculated the current value of each deal based on the number of shares multiplied by the December 31 valuation.

• “On August 14, 2009, we issued 11,052,955 shares of our Class B common stock as consideration to ten individuals and one entity in connection with our acquisition of all the outstanding shares of a company.” This might be FriendFeed, which Facebook reportedly acquired for $50 million. Co-founder Bret Taylor later went on to be chief technology officer. Current value: $328,604,352
• “On May 18, 2010, we issued 3,625,000 shares of our Class B common stock as consideration to a company in connection with our purchase of patents from the company.” This might be the deal to buy the Friendster patents. Current value: $107,771,250
• “On June 16, 2010, we issued 238,000 shares of our Class B common stock as consideration to a company in connection with our purchase of certain assets from the company.” Unclear. It could be Nextstop, whose co-founder Carl Sjogreen is now a director of product management at Facebook. Current value: $7,075,740
• “On July 7, 2010, we issued 590,900 shares of our Class B common stock as consideration to a company in connection with our purchase of certain assets from the company.” Again. Unclear. Could be Nextstop or Hot Potato. Or the higher price could be for Chai Labs, whose co-founder Gokul Rajaram is now leading the charge on advertising. He was nicknamed the Godfather of Adsense. Current value: $17,567,457
• “On August 18, 2010, we issued 289,350 shares of our Class B common stock as consideration to two individuals in connection with our acquisition of all the outstanding shares of a company.” Could be Hot Potato, which was founded by Justin Shaffer, who later worked on Groups and Places. Current value: $8,602,375
• “On October 29, 2010, we issued 1,309,284 shares of our Class B common stock as consideration to a company in connection with our purchase of certain assets from the company.” Probably Drop.io, which saw its chief executive and longtime friend of Mark Zuckerberg, Sam Lessin start at Facebook. He headed up the Timeline overhaul. Current value: $38,925,013
• “On November 12, 2010, we issued 350,000 shares of our Class B common stock as consideration to a company in connection with our purchase of certain assets from the company.” This might be for Walletin, whose co-founder Cory Ondrejka was a chief technology officer at Linden Lab. He’s now leading the charge on building a robust HTML5 platform that will lead Facebook beyond the app era largely ruled by Apple. Current value: $10,405,500
• “On December 15, 2010, we issued 1,030,000 shares of our Class B common stock as consideration to two individuals in connection with our acquisition of all the outstanding shares of a company.” This could be for Rel8tion, which was a mobile advertising startup. Current value: $30,621,900
• “On February 28, 2011, we issued 681,357 shares of our Class A common stock as consideration to a company in connection with our purchase of certain assets from the company.” This might be for Beluga, the group messaging startup founded by former Google product managers that is now powering Facebook’s standalone app Messenger. Current value: $20,256,744
• “On April 5, 2011, we issued 1,659,430 shares of our Class A common stock as consideration to 13 individuals and six entities in connection with our acquisition of all the outstanding shares of a company.” This could have also been for Snaptu, given the high individual count on this deal. Snaptu was said to be one of Facebook’s more expensive acquisitions. It gave a boost to the company’s ability to build apps for the long-tail of feature phones, which Facebook is relying on to fuel its next era of growth in emerging markets. Current value: $49,334,854
• “On August 1, 2011, we issued 75,426 shares of our Class A common stock as consideration to three individuals in connection with our acquisition of all the outstanding shares of a company.” This could be for Push Pop Press, which had some talented designers from Apple. Or it could be Friend.ly, whose team is now working on growth. Or it could have been for Daytum, the company co-founded by Nicholas Feltron, who famously turned his life into a rich infographic. He played a very prominent role at the last f8 when the company rolled out Timeline. Current value: $2,242,414
• “On October 7, 2011, we issued 360,883 shares of our Class A common stock as consideration to 21 individuals and eight entities in connection with our acquisition of all the outstanding shares of a company.” This could be the Gowalla acquisition. The number of participants here seems to be a proxy for the many investors that were in on the location-sharing mobile app. Current value: $10,729,051
• “On October 10, 2011, we issued 183,750 shares of our Class B common stock as consideration to a company for a license of certain technology from the company.” It could be Strobe, which makes a platform supporting mobile web apps that can work on multiple devices and operating systems like iOS and Android. Current value: $5,462,887
• “On January 3, 2012, we issued 90,000 shares of our Class A common stock as consideration to four individuals and 13 entities in connection with our purchase of certain assets from a company.” Unknown. Current value: $2,675,700
• “On February 1, 2012, we issued 212,250 shares of our Class A common stock as partial consideration to two entities in connection with our purchase of certain assets from a company.” Unknown. Current value: $6,310,193

Facebook said it paid out $1.4 billion to developers through payments on its platform in 2011. Apple paid out half that much to iPhone, iPod and iPad developers last quarter.

Apple said it paid $700 million to iOS developers in the holiday quarter during its earnings call last week. While we can’t be exactly sure of how much it paid in all of 2011, the company did say last week that it had paid out $4 billion over the lifetime of the app store, up from the $2 billion cumulative figure it shared less than a year earlier during March’s iPad 2 launch. While the dates of these milestones are probably slightly off, it suggests that Apple paid more than $2 billion to developers last year.

The other thing to consider is that Facebook only made Credits mandatory for canvas games in July, so Facebook’s numbers for the first half of the year don’t reflect the full earnings power of the platform. Since Facebook earned $188 million in payments revenue last quarter, that implies that it paid around $438 million out to developers in the holiday quarter based on its 30 percent revenue share. That’s about 62 percent of what Apple paid developers in the fourth quarter.

What this all means is that Apple’s iOS platform outperforms Facebook on a per-user basis for developers. Consider that Facebook has 845 million monthly active users while Apple has sold 315 million iOS devices (which doesn’t account for users who have more than one iOS device or who upgraded to newer iPhone or iPads). Since the “barrier to entry” to iOS is buying an actual device while joining Facebook is free, we’d naturally expect Apple’s platform to attract a more lucrative demographic.

We know that we’re comparing apples to oranges here (literally). But for developers deciding which platforms to build upon, these trade-offs are very real. Developing an app for Facebook might mean spending fewer resources on smartphone apps. So comparing potential payouts helps developers understand where to wisely invest their time and talent.

Facebook named Google as its prime competitor among others including Microsoft and Twitter in its filing for an initial public offering today.

The Securities and Exchange Commission requires a company to describe all the risk factors associated with investing in its business before it goes public. One of these issues for Facebook is “significant competition” from companies including Google, Microsoft and Twitter. The social network notes that Google or others could use dominant positions in one market to gain an advantage in one of Facebook’s areas of operation.

With 85 percent of its revenue coming from advertising, Facebook competes with both traditional and online media businesses. Advertisers tend to have fixed budgets, and the social network will have to continue to make a case for its ads and Sponsored Stories. We have seen businesses spent significant amounts to generate Likes for their pages, but it is unclear how much advertisers will devote to Facebook once they have amassed an audience. Facebook did not address this in the document today, but it is a trend to watch.

Also critical to maintaining and expanding its position as a display ad platform is user growth and engagement. If users spend less time on Facebook in favor of other social networks or offerings, the company will be negatively affected. It mentioned Google+, along with regional networks Cyworld (Korea), Mixi (Japan), Orkut (Brazil, India) and vKontakte in Russia. The company also recognizes that other Internet or mobile companies could offer products and services that compete with individual Facebook features. It didn’t name names, but these can include everything from Apple’s iMessenger to startups like Instagram.

Facebook acknowledged that Google in particular could gain a competitive advantage by integrating its social networking platform into its existing search product, web browser or mobile operating system. On these fronts, Facebook might have to spend significantly to acquire or partner with other companies. This will be difficult, though, as many companies in the position to help Facebook fight Google are threatened by other aspects of Facebook’s business.

Revenues from Zynga games accounted for 12 percent of Facebook’s 2011 revenues, the social network’s S-1 filing reveals. No other customer represented more than 10 percent of total revenue in 2009 or 2010. Facebook reports that social game devs — most of all Zynga — are currently responsible for almost all revenue derived from Payments.

Aside from in-game transactions conducted with Facebook Credits — of which Facebook gets up to a 30 percent cut as part of a special agreement with the social game giant — and ads bought by Zynga, the CityVille developer also generates a large chunk of pages where Facebook displays ads. While Zynga is locked into Facebook Credits until May 2015, Facebook points out that any trouble in paradise with its biggest game developer could harm its bottom line.

Mark Zuckerberg will take a $1 annual salary starting next year, mirroring other iconic public company founders like Apple’s founder Steve Jobs and Google co-founders Sergey Brin and Larry Page.

Zuckerberg’s total compensation last year was $1.49 million off a base salary of $483,333. Chief operating officer Sheryl Sandberg pulled in $30.9 million, most of which was in stock awards. Mike Schroepfer, who is known internally as “Schrep” and came to the company from Mozilla, pulled in $24.7 million — again, mostly in equity compensation. After that is chief financial officer David Ebersman, who earned $18.7 million and then Facebook’s general counsel Ted Ullyot, who earned $6.96 million.

Facebook board members, including Netscape founder Marc Andreessen, earned $16,667 for serving. Reed Hastings and Erskine Bowles, who just joined Facebook’s board this year were both given around $600,000 in stock-based compensation for coming on-board. We have a more thorough breakdown of the investor table here.

Facebook announced new usage milestones in its S-1 filing today: 845 million monthly active users including 425 million users who access the service on mobile devices.

The company had last claimed 800 million monthly active users  and 350 million mobile monthly active users at its f8 developer conference in September.

Overall, that means the social network has seen a 39 percent increase in monthly active users since December 2010. It saw particularly strong growth in Brazil with a 268 percent increase year-over-year and India with a 132 percent increase. Notably, both of these markets were strongholds for Orkut, an early rival social networking service from Google.

In the U.S., Facebook is starting to hit its saturation point with 161 million monthly active users, a 16 percent increase from the previous year.

It comes as little surprise that a large percentage of users return regularly. Facebook has long said that half of its users access the site daily. The social network had 483 million daily active users in December 2011, an 48 percent increase since December 2010. According to the company’s IPO filing today, 360 million users were active on at least six days a week in December 2011.

Of course, the larger Facebook gets, the harder it may be for it to grow. “We anticipate that our active user growth rate will decline over time as the size of our active user base increases, and as we achieve higher market penetration rates,” the company said in its filing today. “To the extent our active user growth rate slows, our business performance will become increasingly dependent on our ability to increase levels of user engagement in current and new markets.”

One of the last bastions where Facebook might find an additional 500 million or more users is in China — a country it has explored but never formally entered. In addition to government censorship, it would find many mature rivals there including Sina and Tencent. Prospects there do not look promising, especially considering that Google lost substantial search market share there after a disagreement with the Chinese government. “We do not know if we will be able to find an approach to managing content and information that will be acceptable to us and to the Chinese government,” the company’s statement said.

The company defines active user as a registered user who has logged in and visited Facebook through a website or mobile device in the last 30 days. Facebook also shared stats about activity on its platform. As of December 31, 2011, there were more than 37 million pages with ten or more Likes. More than seven million apps and websites have integrated with Facebook.

In its S-1 filing earlier today, Facebook revealed that it took steps to increase the reserve price in its advertising auction system, which increased the minimum bid for some advertisers.

[...] in the fourth quarter of 2011, we increased the reserve price (i.e., the minimum price threshold) in our advertising auction system in order to reduce the frequency with which low quality ads are displayed to users. This change caused a reduction in the overall number of ads shown and increased the average price per ad as a result of factors including the removal of ads with bids that were below the reserve price and some advertisers raising their bids in response to this change.

Gradual increases to the reserve price could be the primary means by which Facebook increases revenue as demand for Facebook ads grows in upcoming years. When the reserve price increases, advertisers with the lowest bids are priced out of their ads being displayed and react by increasing their bids. This subsequently pushes the competition to raise bids. In effect, bid prices cascade upwards as advertisers with the lowest bids force higher bids from advertisers above them.

Here’s the sheet with the breakdown of early investors:

Mark Zuckerberg manages to hold onto 28.4 percent of Class B shares, which have 10 times the voting power of Class A shares. Facebook said in its filing today that it plans to sell up to $5 billion worth of Class A shares. Remember that Facebook has a dual-stock structure like Google, which enables the company’s directors and Zuckerberg to have more power over the long-term direction of the company without feeling short-term pressures from shareholders.

Facebook’s first venture investor Accel Partners and its representative on the company’s board Jim Breyer hold onto 11.4 percent of the Class B shares. Coming in after that is co-founder Dustin Moskovitz, who holds 7.6 percent of Class B shares. After that is DST, the Russian late-stage investment firm run by Yuri Milner, which holds 5.4 percent. Following that is Peter Thiel, who was the company’s first angel investor, with 2.5 percent. The remaining directors and investors each hold less than 1 percent of the company.