Campbell et al v. Facebook Inc.

Filing 149

RESPONSE (re 138 MOTION to Certify Class ) Opposition to Plaintiffs Motion for Class Certification (Redacted) filed byFacebook Inc.. *** ATTACHMENTS 1, 7 LOCKED AT FILER'S REQUEST. SEE DOCUMENT 162 *** (Attachments: # 1 Declaration Declaration of Christopher Chorba In Support of Defendant Facebook, Inc.s Opposition to Plaintiffs Motion for Class Certification (Redacted), # 2 Declaration Declaration of Alex Himel In Support of Defendant Facebook, Inc.s Opposition to Plaintiffs Motion for Class Certification (Redacted), # 3 Declaration Declaration of Dan Fechete In Support of Defendant Facebook, Inc.s Opposition to Plaintiffs Motion for Class Certification (Redacted), # 4 Exhibit Expert Report of Dr. Benjamin Goldberg (Redacted), # 5 Exhibit Exhibit BBB to Expert Report of Dr. Benjamin Goldberg, # 6 Exhibit Exhibit CCC to Expert Report of Dr. Benjamin Goldberg, # 7 Exhibit Expert Report of Dr. Catherine Tucker (Redacted), # 8 Exhibit Exhibit DDD to Expert Report of Dr. Catherine Tucker, # 9 Exhibit Exhibit EEE - Expert Report of Dr. Catherine Tucker, # 10 Exhibit Exhibit FFF - Expert Report of Dr. Catherine Tucker, # 11 Exhibit Exhibit GGG - Expert Report of Dr. Catherine Tucker, # 12 Exhibit Exhibit HHH - Expert Report of Dr. Catherine Tucker, # 13 Exhibit Exhibit III - Expert Report of Dr. Catherine Tucker, # 14 Exhibit Exhibit JJJ - Expert Report of Dr. Catherine Tucker)(Chorba, Christopher) (Filed on 1/15/2016) Modified on 1/22/2016 (ewn, COURT STAFF). Modified on 1/22/2016 (vlkS, COURT STAFF).

EXHIBIT JJJ

Exhibit JJJ
Torres Social Graph Valuation
Q1'12-Q3'15 Facebook Revenues and Expenses
Including Research & Development Expenses

Annual Profit Calculation
Facebook Average Quarterly
Advertising Revenue, US and
Canada ($ mil)1
[A]
1,071

Ratio of US to US and
Canada Population 2
[B]

US Ad. Revenue per
Quarter ($ mil)
[C] = [A] * [B]

Average Expenses as a
Percentage of Revenue 3
[D]

Annual Profit ($ mil)
[E] = (4*[C]) * (1-[D])

89.96%

963

72%

1,097

Social Graph Valuation
Year
1
2
3
4
5
6
7
8

Annual Profit ($ mil)
1,097
1,097
1,097
1,097
1,097
1,097
1,097
1,097

Discount Factor 4
0.8427
0.7102
0.5985
0.5044
0.4251
0.3582
0.3019
0.2544
Total Value:

Discounted Value ($ mil)5
925
779
657
553
466
393
331
279
4,383

Notes:
1. Average of Q1'12-Q3'15 advertising revenue, US and Canada as presented in Exhibit 1.
2. See Torres Report, footnote 66.
3. Average of Q1'12-Q3'15 total expenses as a % of revenue as presented in Exhibit 1.
4. Calculated as 1/(1+r) n, where r is the 18.66% discount rate calculated by Dr. Torres and n is the number of years. See Torres Report, ¶42 and Exhibit 1.
5. Annual profit ($ mil) * discount factor.
Sources:
1. Facebook, Inc. Form 10-K 2013-2014. Retrieved from SEC EDGAR website http://www.sec.gov/edgar.shtml.
2. Facebook, Inc. Form 10-Q 2013-2015. Retrieved from SEC EDGAR website http://www.sec.gov/edgar.shtml.
3. Report of Fernando Torres In Support of Plaintiffs’ Motion for Class Certification, Matthew Campbell and Michael Hurley et al. v. Facebook, Inc. , Case No. C 1305996 PJH (MEJ), United States District Court, Northern District of California, November 13, 2015.