Editor’s Note: When I was still in college and dreaming of getting paid to write, my friends started a magazine. I wanted to contribute. At the first ideas meeting I mentioned a social network that was quickly taking over all the Ivies and would soon, we all knew, arrive at our campus. The site’s creators had dropped out of Harvard to work on their project full time. They were in Palo Alto, and I’d be home in California for the summer. Maybe I could make the six-hour drive to visit them? So I did. I drove up and visited and met Zuck and attempted, in a somewhat naïve but earnest way, to make sense of what Thefacebook was and what it might eventually become.

On the way up, I got a speeding ticket, so arrived later than planned. I walked in through a wide-open front door; I saw the burnt out Tiki torches and the aftermath of generally minor, college-ish debauchery; I met Zuck, who was standoffish but generous with his time and driven and careful in a way that seemed well beyond his, or my, years. And he told a funny “your mom” joke.

Below is the article I wrote about Thefacebook as it ran in The Passenger magazine in 2005. Of course it feels dated, and, to me, the writing feels young. (Also, I ripped off the conceit of the first paragraph from a Charles P. Pierce essay. At least it was in good taste.) Perhaps most embarrassing of all, for everything I saw, I didn’t see the money. In some way, though, not seeing all the riches that lay ahead for Zuck and Co. allowed me some clarity. There is, it turns out, something even bigger, even cooler, than $100 billion. And it’s this thing, I think, that drove Zuck then — that drives him still.

By Ryan Bradley, senior editor

Mark Zuckerberg with Dustin Moskovitz, circa 2004.

FORTUNE — We should have seen it coming.

We should have known better and barred the doors, battened the hatches, hid the children and said a prayer. But no. We invited it into our homes. Let it stay. Gave it space, a desk or even a room. Gave it our time, our money, our phone lines. Provided for it. Ogled it and praised it. Loved it for its size, its immeasurable size. Loved it with that American love for open spaces, the same love that led our great grandparents to cross plains, deserts and mountains-new territories and the unknown.

We should have seen it coming. We kick ourselves and wince. We fed it everything, this insatiable beast: credit card numbers, social security numbers, names of first pets and mother’s maiden names. Christ, some of us learned sex from it, had sex on it, watched people having sex in ways we still do not understand. But we kept one thing forever hidden from it, until everything we’d given wasn’t enough-and the internet took our face.

It was a gradual taking. Sites like Hotornot.com and UglyPeople.com allowed the especially cruel and invested among us to judge strangers, wondering all the while why they had volunteered for such abuse. We found pretty faces, ugly faces, photoshopped faces. Faces not of people with exotic names and bodies, but faces from our state, our county, city, school, dorm, class; low-resolution faces full of braces and pimples. Slowly, the sites began masquerading in purpose beyond procrastination. The middle-aged could find former classmates at the yearbook picture database Classmates.com. The lonely could find a date at AmericanSingles.com or LoveCompass.com or Lavalife.com or PlentyofFish.com or Datingpearl.com or, well, just about anywhere in the limitless cyber-universe full of faces and possibility. Low-resolution faces connected with low-resolution faces and somewhere along the way our bastions of education decided they’d have a go. MIT and Columbia tried their own inter-campus, face-based networking programs, and then Harvard tried the same.

Problem was, all initial attempts at networking came from administrators, squares, rubes that had lost touch with the student body long ago. The suits scratched their heads and slumped their academic shoulders and questioned the sanity of youth while a streaker ran past their window. These face-sites didn’t have what we wanted, didn’t have the searching capabilities, didn’t let us say what we wanted to say or find other people who were interested in cheese, Russian literature and Fela Kuti.

But Zuck! Zuck could do it. Zuck was our guy. Zuck was one of us and knew what we wanted. And Zuck could do it faster, better, sooner than the squares. And Mark Zuckerberg did. He created Thefacebook.

“Harvard [administrators] were working on their own inter-campus networking program, but Zuck approached them and he said he’d do it in a week and he’d do it better–and he did,” says Zuckerberg’s friend and Thefacebook compatriot Dustin Moskovitz.

The audacity! Saying you’ll do something better and faster and then doing it. Zuck had a knack for knowing what students would want, and he knew how to program the necessary features. He knew that college students want options–the option of self-expression, the option of listing our sexual leanings, the option of finding classmates, the option of making ourselves look more attractive and interesting than we actually are. Zuck and company gave us all of these things, and more–because Zuck knew that what we abhor above all is stagnation, and as long as Thefacebook kept growing and changing, we would be drawn to it.

And Thefacebook grew and grew, taking over the Harvard campus, the Ivy League, the private schools, the state schools, the East Coast, the West Coast, the Midwest, the South, the country.

And now the beast dwells in a small bungalow at the end of a cul-de-sac in Palo Alto, cared for by five kids not from the West but westerners nonetheless. Five kids busily staring into glowing screens, eyes red, wrangling bandwidth. I walked in the front door on an unseasonably warm September evening. The door was open and ignored. Half-finished chip bags, pizza boxes, bottles of Corona and Pacifica and empty bags of In-N-Out covered every bit of counter space around Zuck’s Sony laptop. There was an electronic hum, barely audible, and the faint sound of crickets from the backyard. All five sat at tables, five different tables, each surface covered with its own unique assortment of excessive litter surrounding a computer. Zuckerburg, the founder, creator, and leader of the outfit, looked up for a moment, then returned to his laptop and the programming jargon that flashed across the screen. Dustin Moskovitz, also supposed to be a junior at Harvard, also stopping out for a year, also 20, acknowledged me with a quick smile. Moskovitz had told me on the phone, a few hours earlier, to “keep an open mind” when I came to visit.

Moskovitz and I had been corresponding over email for months. They were a dodgy lot, these five kids slumped over keyboards and staring into glowing screens. I was happy to finally pin them down.

Wed Jun 23: Hi Ryan, I guess just give us a call when you’re around. We’re not planning to take any vacations during the summer, so you’ll be able to meet with us for an hour or so. We are pretty busy though, so just make sure to contact us the day before.

Wed Jul7: Yeah, sure. Well, maybe Friday wouldn’t be best for us as we’re planning on throwing a party. I guess you could go if you wanted, but we tend to run around getting stuff when we do that. Are you planning on staying around a few days?

Sun Aug 8: Hi Ryan, We’re actually extremely busy this late in August. We’ve sort of entered crunch time. However, I think our normal press guy should be returning state-side relatively soon. You may have better luck trying to get in contact with him again (press@thefacebook.com) and arranging an interview that way. I apologize for the inconvenience,
Dustin

Wed Aug 11: Hi Ryan, I talked it over with Mark. I guess if you came the last week of August or early September (we stopped out, so not going back to Harvard…), you could chill for a while.

Fri Sep 3: Man, you’re killing me Ryan. Can you make it to a party on Saturday? (during the day). Maybe Wed. or Thur. but next week will probably be the most intense week of thefacebook’ s existence (i know a reporters dream) so it may not be possible. I’ll have to let you know sooner to the date.

It was the most intense week of Thefacebook’s existence. The crew was busy releasing Thefacebook on college campuses, crunching in hours to make sure the release date corresponded to the beginning of the school year in early September. In the past week Thefacebook had opened on 41 new campuses, and had been wildly popular (in varying degrees of wild popularity) on each. Drawn on a whiteboard was a tournament-style bracket system that pitted the schools against each other in terms of Thefacebook popularity–Uconn vs. Rutgers, Irvine vs. Brandeis, UT vs. Vassar. At the time of my visit, Thefacebook had opened on more than 120 college campuses. Three months later, that number had grown to more than 200. At each of the 203 campuses–from American to Yale–the popularity is phenomenal, always over 60 percent. At Harvard, student-members make up well over 90 percent of the student body.

“It’s always kind of a surprise which schools Thefacebook really takes off on,” Moskovitz says.

He takes me through several new features, some recently released, some still being tested. He tells me how important it is, for them, to keep Thefacebook “built by college students, for college students.” How it’s a networking tool, a study tool; how, with a new calendar feature, Thefacebook makes our lives more organized and easier.

He pauses, again flashing a smile, “But most guys still just use it to look for chicks.”

And will It ever stop? We search ourselves, our photos, others’ photos–searching for reinvention, an opportunity to appear better, more interesting, more social, more than we really are. We question our friendships, our social networks. Hidden in our rooms, we secretly scan pages looking for more attractive, more interesting, more exotic faces. And can we help it?

Best-laid plans.

One of the more fascinating new features Thefacebook offers is the creation of “groups.” The groups feature allows a user to invite other users into his or her group, through which online message board discussion ensues. But it’s also just a group. Which is to say that Thefacebook has, brilliantly, recreated the real life social scene online–complete with cliques and gossip, playing into all of our insecurities. Now we can be more attractive, have more friends, be in more groups then we ever were in high school. And isn’t college about reinvention?

There is a pool in Zuck’s backyard, but the lights have burnt out from too many pool parties. There are tiki torches, burnt out for the same reason. I look at the empty bag of In-N-Out next to the Cape Cod salt and vinegar chips next to the Corona next to the pizza box next to cases of blockbuster movies (Zoolander, Happy Gilmore) next to Zuckerburg’s laptop next to Zuck and contemplate the lifestyle we have enabled them to lead. Our overwhelming desires, our collective insecurities, our wanting Thefacebook to be the all-encompassing collegiate phenomenon that it has become landed in between piles of chips and beer in a Palo Alto bungalow.

We could have seen it coming. Zuck had been on the techno-radar since high school, turning little programming projects into multi-million dollar ideas. There was the software he and a Phillips Exeter friend, Adam D’Angelo, came up with that tracked the listening habits of users on Winamp, an MP3 player program. D’Angelo, now a student at CalTech, works with Zuck and Moskovitz in Palo Alto. He and Zuck had offers in the millions for their program from the likes of Microsoft and America Online, but they sat on it and by the time they were ready to sell the offers had been dropped.

And then there was Facemash. A short-lived, much controversial site in the vein of Hotornot.com that pitted two Harvard faces against each other and allowed users to vote on which was the more attractive. The site was taken down, amidst public outcry, in less than a week. There was its predecessor, Coursemash, a program that allowed students to network with people enrolled in the same classes.

Zuck himself was an indication of things to come. A kid who, friends say, gets so absorbed in his little ideas that he forgets to eat or sleep and rarely leaves his slouched, edge-of-seat position in front of his laptop until his little idea is manifested or dropped. Most are dropped, or passed around through his group of friends and never released to the public.

A kid who, in an interview with the Harvard Crimson, said of his little facebook idea: “I do stuff like this all the time. Thefacebook literally took me a week to make.”

A kid who’s too low-key to appear arrogant and arrogant enough to appear genius.

Zuck was quiet, almost nervous in my presence. He joked about how every college publication does at least one story on Thefacebook. How I’m not with Time, but hey, it’s press. How, um guys, do you want to take this picture? How he doesn’t really have time to talk now, or tomorrow, or in the next few days or weeks. How they do get paid a marginal amount, like all software engineers, but couldn’t disclose how much and wouldn’t let me photograph his newest scheme, scribbled on a large whiteboard, standing on end near his table of trash and his laptop. Everything in the bungalow is near a table and trash and a laptop.

I asked them why. What makes them work seven-, eight-hour days for a little cash from the ads on the site? Why don’t they just cash out? Buy an island or something?

“I don’t know,” Moskovitz says, “what kept us going through all this Zuck?”

“Your mom.”

“No, she wasn’t a part of this yet.”

But, really, the bungalow could be filled with bottles of Cristal, not Corona. These kids could be living like rockstars, not hunched and red-eyed and weary. Forget the pay, forget the pool and the cul-de-sac and the mild climate. Why are they still there, working to bring Thefacebook to every damn college kid in the nation?

“I think … well, I mean, everyone on Harvard’s campus knows Zuck by name. I think he’s kind of into that,” Moskovitz says.

Milan Kundera, in his novel Immortality, speaks not of a religious immortality of the soul, but of a different, earthly immortality. A kind everyone can achieve in his or her own life. “Greater immortality,” Kundera writes, “means the memory of a person in the minds of people who never knew him personally.”

And there it is, plainly spelled out on the bottom of our screens–thousands of screens, everyone’s screen—

a Mark Zuckerberg production
Thefacebook © 2005

And when the empty boxes of chicken nuggets, the half-eaten candy bars and the squalor of a pool without lights fades away, what we will remember in 10, 20, 30 years is Thefacebook. And wasn’t that a funny part of college? Wasn’t it silly how much time we spent on it? Wasn’t it strange that I name dropped and networked and cared so much about something so intangible? And maybe, just maybe, we’ll remember Zuck. Not so much the name, really, but the idea of Zuck. A kid, like us, whose little idea took off and took over. And maybe, just maybe, we’ll tell our kids about It.

I left soon after snapping some photos and trying in vain to pry more team members away from their glowing computer screens. Zuck, nervous still, asked that I take a picture that didn’t show any of the beer bottles, as he and Moskovitz are underage. They quickly jumped on the couch and joked around–posing for a mock embrace. When I was finished the pair returned to their computers. Business as usual. I checked my watch. 10:53 p.m. Still unseasonably warm. Thefacebook guys showed no signs of stopping.

As I got up to leave, Zuck and Moskovitz gave nods of acknowledgement–Moskovitz threw up an arm. Not stopping, not looking away from the glowing screens. Each carving out their own piece of immortality.

Filed under: Contributors, Uncategorized

FORTUNE — Suddenly you can see the advantage — both for developers and users — of Apple’s (AAPL) approach of limiting the number of iOS devices on sale at any time to a handful of iPads, iPhones and iPod touches.

Google (GOOG) executive chairman Eric Schmidt downplays the challenge of knowing ahead of time which Android apps will run on which devices. Developers complain about “fragmentation” of the Android ecosystem. He suggests that they think of it, instead, as “differentiation.”

You can see a live, mouseable version of the chart at OpenSignalMaps’ website here. The products represented range from the popular Samsung Galaxy SII (61,389 downloads) to more than 1,300 single downloads from relatively obscure devices such as the Concorde Tab (a 10.1-inch Hungarian tablet), the Lemon P1 (a dual SIM Indian phone), the Energy Tablet i724 (a Spanish tablet aimed at home entertainment).

Via TechCrunch.

Filed under: Apple 2.0

Jeffrey Gundlach. Reuters

FORTUNE — See on the chart at right where Apple’s (AAPL) share price dropped to just over $540 shortly after 3 p.m. Wednesday?

That corresponds roughly to when the fund manager pictured above left, DoubleLine Capital’s Jeffrey Gundlach, told a room packed with investment managers that he was shorting Apple. “I just wonder how many people will queue up around the block for an iPad 87,” he said.

David Einhorn

See where the share price popped back up just before the closing bell? That happened after the next speaker, David Einhorn of Greenlight Capital, a hedge fund famous for taking very large short positions, said Grundlach was flat wrong. Apple won’t lose its appeal if it stops making a new hit product every year. That “assumes that Apple is a hardware company. It’s not,” he said, according to the Wall Street Journal‘s account of the meeting. “Apple is a software company. Its value comes from iOS, the App Store, iTunes and iCloud.”

According to Einhorn, hedge funds own only 5% of Apple’s 935 million shares, as if to suggest that weren’t enough to make a dent in the stock price.

But those funds are managed by guys who know a thing or two about leverage.

So if you are wondering who could have brought Apple’s share price down more than $100 from its all-time high of $644 on April 9 to its low for the day of $541.04 — carving $96 billion out of the company’s market cap in the process — you might start with the men who gathered Wednesday in Lincoln Center’s Avery Fisher Hall for the Ira Sohn Conference to talk about the market and raise money for pediatric cancer research

Here’s the list of the day’s speakers, courtesy of ValueWalk:

• Bill Ackman, Pershing Square Capital
• Dwight Anderson, MP of Ospraie Management
• Dan Ariely, Professor, and expert in Behavioral finance
• David Einhorn, CEO of Greenlight Capital
• Jeffrey Gundlach, CEO of Doubleline, Bond Guru
• Jonathan Kolatch, CEO of Redwood Capital
• Philippe Laffont, PM of Coatue Management
• John Lykouretzos, PM of Hoplite
• Steve Mandel, CEO of Lone Pine Capital
• John Paulson, PM of Paulson & Co
• Larry Robbins,  CEO of Glenview Capital Management
• Kenneth Rogoff, Professor, Co-Author of Eight Centuries of Financial Folly
• John Wilder, Chairman of Bluescape Resources
• Meryl Witmer, GP at Eagle Capital Partners

Filed under: Apple 2.0, Fastest-Growing Companies

137 Ventures founders (from left) Justin Fishner-Wolfson, Kathy Chan, and Alex Jacobson in San Francisco

FORTUNE — In 2010, after three years as a communications manager at Facebook, Kathy Chan left. The 28-year-old’s Facebook shares were the equivalent of a winning lottery ticket — the company’s valuation in private markets had already soared to $23 billion, but it was still a few years from its IPO. To keep her stock options when she quit, Chan would have had to pay a tax that could have totaled more than 30% of their value. So she sold a portion of her stock — which is likely to be about 300% more valuable at the time of Facebook’s imminent IPO — to cover her taxes. The vexing nature of Chan’s problem provided the impetus for her next business.

She teamed with Justin Fishner-Wolfson and Alex Jacobson — both alumni of the venture capital firm Founders Fund — to start a San Francisco-based investment group, 137 Ventures. (The prime number comes from Fishner-Wolfson’s grandfather, who for decades worked at the New York Stock Exchange; 137 was his annunciator code.) The trio has raised $50 million so far, landing shares at some of the hottest companies in the Valley while helping early employees gain liquidity without having to sell their stock.

More: 10 brilliant tech visionaries

Similar investment vehicles have been created before, but they are extremely rare because the tax structure can be complex. And not everyone qualifies for a 137 Ventures loan — most people don’t, in fact. Fishner-Wolfson, 29, and Jacobson, 40, are looking for late-stage companies likely to have outsize returns. The stock acts as collateral for the loan. Loan recipients negotiate interest rates (usually from 5% to 8%) and offer 137 Ventures the opportunity to exercise a small percentage of their options. The fund has made five loans, between $500,000 and $5 million each, to the likes of Joe Lonsdale, who helped found the analytics company Palantir Technologies in 2004. He calls 137 Ventures a “creative way of hacking the system,” adding that it works in part because investors know and trust these Silicon Valley aficionados.

There’s another reason people haven’t had much success with this business model in the past. Employee stock options were designed in part to make it difficult for people to leave before an initial public offering. After all, if anyone could cash in early, everyone would be doing so. Still, many venture-backed tech companies were never intended to be private for so long, and their anticipated values have rarely been so large. In a way, 137 Ventures speaks to these heady times in the Valley — both to the problem it solves and the fact that the outfit exists at all.

This story is from the May 21, 2012 issue of Fortune.

Filed under: Uncategorized

By Miguel Helft & Jessi Hempel

FORTUNE — In Facebook’s video IPO roadshow, Sheryl Sandberg, the company’s chief operating officer, delivers a powerful line intended to impress potential investors: “In the United States, every day on Facebook is like the season-finale of American Idol — the most popular show on television — times two.” It’s an impactful boast, but as it turns out, Sandberg is playing it pretty safe. Every day, 188 million people log into Facebook in the U.S. and Canada. That’s actually four to five times the number who tuned in to the season finale of American Idol. Wow, indeed.

And yet, Sandberg’s boast also highlights a problem. American Idol’s season finale brought in more than $40 million in advertising, according to industry estimates. On a typical day last year, Facebook (FB) took in just $5.6 million or so in the U.S. So conservatively, each set of eyeballs trained on the mewling of contestants on Fox is worth at least 30 times more than those checking in with friends and family on Facebook. And it’s not just television that Facebook lags behind. Every one of its 900 million users generates a little more than $4 in revenue for Facebook in a year. By comparison, Google (GOOG) grosses at least 7 times more from each one of its users. In other words, Facebook makes gobs of money because of its massive reach, not because it is a particularly effective advertising medium.

As Facebook seeks to justify and sustain a mammoth valuation that seems certain to top $100 billion, it faces enormous challenges. First and foremost, the social networking service must find a way to accelerate the growth of its advertising business, which slowed to 45% in the most recent quarter from nearly twice that rate the year before. And it must do so in the face of headwinds from the rapid shift of users from the Web to mobile devices, where Facebook’s monetization efforts are still nascent. In short, for all its promise and its potential to revolutionize entire industries, Facebook must prove to advertisers and investors that it can build a global ad business to match the power of a social networking product that has become a habit for nearly one of every seven people on the planet.

MORE: How does the social media giant really work?

To be sure, the fact that Facebook’s advertising prowess lags behind its preeminence as a social hub is by design. Zuckerberg has always made the Facebook product his top priority, sometimes at the expense of the company’s ad business. But now that Facebook will be a public company, his team will be under enormous pressure to deliver financial results that keep investors happy. Here are three things he should focus on to achieve that.

No. 1 Advertising
Facebook ads have become table stakes for any online display advertising campaign, but as these ads move from experimental purchases to the cornerstone of many advertising strategies, Facebook must show to advertisers that these spots deliver significant returns.

In the past year, Facebook’s approach to advertising has changed. Now, rather than simply sending salespeople out to sell its ad inventory, Facebook has begun to hire MBA-carrying “relationship managers” with experience in the industries from which the advertisers hale. These folks call their clients “partners” instead of “advertisers” and encourage large bands like Procter & Gamble (PG) to stop chasing “Likes” and, instead, look at what people are actually saying and doing on Facebook that relates to them — engagement. Facebook believes that if brands can jumpstart these conversations on fan pages and within apps they’ll naturally buy more ads.

Facebook attempted to coin new language for this when it launched its latest advertising strategy last February. Advertisers can pay Facebook to highlight “sponsored stories” in users’ Newsfeeds. The idea is that users will only see these sponsored stories when they are posted by a friend or a business with which they’ve already chosen to connect. It sounds great, but the effectiveness of sponsored stories is far from proven. In fact, some brands are questioning the value of advertising on Facebook altogether. GM (GM), which last year spent $10 million with Facebook, decided to stop advertising on the platform because the company’s marketing executives weren’t seeing the impact they desired. Unlike Google, which stumbled on a magic formula with search marketing, Facebook has yet to find its silver bullet.

No. 2 Mobile
Facebook’s users are decamping to mobile devices faster than the social network can keep up. American Facebookers who use the service on both their desktops and on mobile apps are spending more time on their smartphones and tablets — about 7.4 hours each month, according to Comscore (SCOR) — than on the website itself — about 6.5 hours each month.

MORE: Meet the man behind the Facebook IPO

This poses two significant challenges for the company. First, mobile screens are small so Facebook users see fewer ads. This unsettling trend is disproportionately impacting some of Facebook’s most important advertising markets. In recent regulatory filings, Facebook said the shift is happening fastest in places like the United States, Brazil and India.

Second, even if Facebook can figure out how to serve up more and better mobile ads, the company lags behind its rivals on mobile strategy. Apple (AAPL) and Google make the operating software for the most popular smartphones on the market. It’s possible that over time, Google could integrate its Facebook competitor, Google+, into its Android phones and tablets more seamlessly than Facebook, giving it an advantage with consumers. In the last couple years, Zuckerberg has attempted to forge closer ties with Apple. The companies have held multiple rounds of discussions, according to people with knowledge of the talks. But they have yet to find a compelling way to collaborate, and in the meantime, Apple has chosen to integrate Twitter, rather than Facebook, into its mobile software.

To combat its rivals, Facebook has moved aggressively to acquire mobile assets. Most notably, Facebook recently agreed to purchase the photo-sharing app Instagram for $1 billion. The company will get a fast-growing product with tons of users and — perhaps more importantly — a pool of talented programmers experienced in designing for handheld devices. The sale isn’t expected to close, according to recent regulatory filings, until later this year.

No. 3 China
Call it Facebook’s black hole: The world’s biggest social network, as of now, has no presence in China. With some 500 million people online, China is the world’s largest Internet market by number of users. About half of those users are active on locally grown social networks. It’s a vast and potentially lucrative market for Facebook, but for the time being it’s likely to remain elusive.

Zuckerberg’s interest in China is no secret. He has been learning Mandarin and has visited the country on various occasions, most recently in March, when he traveled to Shanghai with his Chinese-American girlfriend, Priscilla Chan. Inside Facebook, Zuckerberg’s has led intense discussions among senior management on the risks and rewards of going into the Chinese market, according to people familiar with the situation. And he has held discussions with various Chinese Internet companies, including search giant Baidu, to explore potential joint ventures, which would almost certainly be required for Facebook to be allowed to operate in the country.

MORE: Facebook IPO date has tax implications

Zuckerberg is also said to be eyeing China as a source of talented engineers. In recent months, however, the internal and external discussions about China have died down as the attention of Facebook’s senior brass has been focused on the I.P.O., the people familiar with the discussions said. In its I.P.O. prospectus, Facebook acknowledged the obvious, saying the Chinese market “has substantial legal and regulatory complexities,” but that the company will “continue to evaluate entering China.”

For now, Facebook is likely to focus its international expansion efforts in countries like Japan and South Korea, where it is struggling to compete with local rivals, and emerging markets like India and Brazil, where Facebook has made significant inroads but has lots of room to grow. Down the line, Zuckerberg and Co. will no doubt try to formulate a China strategy. Whether it will ever pay off is an open question. After all, it’s the Chinese government, not Facebook, that will have final say on whether Facebook can enter the market there. That leaves investors thinking of China as potential bonus whose value may never be realized. “I’m not paying anything for China,” says Lou Kerner, founder of the Social Internet Fund, which invests in private shares of social and mobile companies.

– with reporting by Alex Konrad

Filed under: Contributors

The story I haven’t seen yet is that this may be the last of its kind, at least as far as individual investors are concerned. Google and Facebook only went public because of 500 shareholders, but now that constraint is about to be gone.

So we can expect early investors and high-net-worth folks to hold on through the entire growth phase, since by the time a company has 2,000 shareholders, it is much more likely to exhibit growth patterns associated with more mature entities.

Of course there can be exceptions, but I believe it to be a safe statement in general. So, for a while, this may be the last time that individuals will have access to the biggest and most clearly successful venture backed companies while they are still close to their rapid growth phase.

Filed under: Term Sheet, Venture Capital Deals

FORTUNE — Facebook (FB) is going public this week and, for many existing shareholders, it’s not a moment too soon.

If the company begins trading on Friday, it would be exactly 228 days before the end of 2012. Or, put another way, 228 days before capital gains tax rates are expected to rise.

Why does this matter? Because Facebook has instituted a series of “lock-ups” for existing shareholders, including company employees.

The vast majority of these expire 181 days after Facebook goes public, which likely means they expire on November 15. At that point, holders would have just six weeks to get liquid before 15% capital gains rates expire and are replaced by the pre-Bush 20% rates. In fact, 20% might be a floor, depending on how the elections go — given certain Democratic proposals to increase capital gains rates even more on high earners (a bucket into which most current Facebook shareholders would almost certainly fall).

“I don’t care if the IPO in May or June, so long as it isn’t in July,” said one current Facebook investor, who bought shares on the secondary market from company employees.

But not everyone necessarily feels that way. Certain Facebook shares are locked up for 211 days after the IPO, which would work out to December 17 (technically the day before, but that would be a Sunday). So, for those positions, pricing now is imperative.

In fact, the only current Facebook shareholders locked up past 2012 will be Russia’s DST Group and Mail.ru Group. Those firms, which are selling around 35% of their holdings at IPO, will be prohibited from selling additional shares until May 19, 2013.

Sign up for Dan’s daily email newsletter on deals and deal-makers: GetTermSheet.com

Filed under: Term Sheet, Venture Capital Deals