Facebook’s earnings decline 12%

Facebook, the social network planning an initial public offering, said first-quarter profit fell 12 per cent as sales growth slowed and marketing costs more than doubled. Net income dropped to $205 million in the three months through March, California-based Facebook said in a regulatory filing. Sales climbed 45 per cent to $1.06 billion, a slowdown from 55 per cent in the December period. Expenses surged to $677 million, reflecting higher costs of helping marketers reach Facebook’s growing user base, which swelled by one-third to 901 million last quarter. The company may struggle to reach EMarketer’s projection for 2012 sales of $6.1 billion as it awaits the full impact of new tools aimed at wringing more money from advertisers, said Debra Aho Williamson, who helped construct the researcher’s estimate. “Facebook has a pretty steep hill to climb to meet the expectations that we set out,” Williamson said. Facebook may seek an IPO valuation of $75 billion to $100 billion, people with knowledge of the matter have said.