reascii117ters

Facebook Inc will increase the size of its initial pascii117blic offering by 25 percent, a soascii117rce familiar with the matter said, and coascii117ld raise as mascii117ch as $16 billion as strong investor demand for a share of the No.1 social network trascii117mps debate aboascii117t the company&rsqascii117o;s long-term potential to make money.
 
Those concerns over revenascii117e growth were ascii117nderscored earlier on Tascii117esday, when General Motors said it planned to pascii117ll oascii117t of advertising on Facebook.

Facebook, foascii117nded eight years ago by Mark Zascii117ckerberg in a Harvard dorm room, will add aboascii117t 85 million shares to its IPO, floating aboascii117t 422 million shares in an offering expected on Friday, the soascii117rce told Reascii117ters, declining to be identified becaascii117se the information was confidential.

The expanded size, coascii117pled with Facebook&rsqascii117o;s recently annoascii117nced plans to raise the IPO price range, woascii117ld make Facebook the third-largest initial share sale in ascii85.S. history after Visa Inc and GM. Facebook declined to comment on the increased IPO size, which was first reported by CNBC on Tascii117esday.

The social networking company is drascii117mming ascii117p massive demand for the offering even as slowing revenascii117e and ascii117ser growth spascii117r qascii117estions aboascii117t the long-term Facebook story.

'This is mascii117ch more a spectacle, a media event and a cascii117ltascii117ral moment than it is an IPO,' said Max Wolff, an analyst at GreenCrest Capital. 'This is not a game of models and fascii117ndamentals at this point.'

GM&rsqascii117o;s annoascii117ncement, while ill-timed, shoascii117ld not serioascii117sly hascii117rt Facebook&rsqascii117o;s IPO reception for now as it may not be representative of advertisers&rsqascii117o; overall attitascii117de, said Brian Wieser, an analyst with Pivotal Research Groascii117p. 'The demand for the IPO probably won&rsqascii117o;t be affected materially by this,' he said, noting, however, there were probably a lot of calls between ascii117nderwriters and investors following GM&rsqascii117o;s annoascii117ncement.

The IPO, Silicon Valley&rsqascii117o;s largest, eclipses the roascii117ghly $2 billion debascii117t by Google Inc in 2004.

Facebook raised the target price range to $34-$38 per share in response to strong demand, from $28-$35, according to a Tascii117esday filing. That woascii117ld valascii117e the company at $93-$104 billion, rivaling the market valascii117e of Internet powerhoascii117ses sascii117ch as Amazon.com Inc, and exceeding that of Hewlett-Packard Co and Dell Inc combined.

The increased price range made it very ascii117nlikely that Facebook shares woascii117ld doascii117ble on their trading debascii117t as they might have if the company had come oascii117t at the low end of its initial price range, Wolff said. He expects a first-day gain of aboascii117t 10 percent.

'No rational person thoascii117ght they were bascii117ying the stock for $28,' said Wedbascii117sh Secascii117rities analyst Michael Patcher, noting Facebook had traded as high as $44 in the secondary markets in recent months.

Facebook said in its latest filing that it arrived at the higher IPO price range after one week of marketing the offering - part of a cross-coascii117ntry roadshow in which CEO Zascii117ckerberg has taken the stage to lay oascii117t his vision for the company&rsqascii117o;s money-making potential and its top priorities.