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Facebook cites Google+, Twitter among rivals, says growth will slow

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Facebook Inc. is king of the social media world now, but the tech giant is looking over its shoulder.

In its S-1 filing Wednesday, Facebook said its business was ‘highly competitive’ and that the competition ‘presents an ongoing threat to the success of our business.’

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‘We face significant competition in almost every aspect of our business, including from companies such as Google, Microsoft and Twitter, which offer a variety of Internet products, services, content and online advertising offerings, as well as from mobile companies and smaller Internet companies that offer products and services that may compete with specific Facebook features,’ the company said.

Facebook said it also faced competition from ‘traditional and online media businesses for advertising budgets’ as well as social networks such as Google+ and regional sites. Facebook said some of its current and potential rivals ‘have significantly greater resources and better competitive positions in certain markets than we do.’

‘These factors may allow our competitors to respond more effectively than us to new or emerging technologies and changes in market requirements. Our competitors may develop products, features or services that are similar to ours or that achieve greater market acceptance, may undertake more far-reaching and successful product development efforts or marketing campaigns, or may adopt more aggressive pricing policies,’ the company said. ‘As a result, our competitors may acquire and engage users at the expense of the growth or engagement of our user base, which may negatively affect our business and financial results.’

Facebook also said it expected its growth rates to decline in the future. It said annual revenue grew 154% from 2009 to 2010 and 88% from 2010 to 2011.

‘Our user growth and revenue growth rates will inevitably slow as we achieve higher market penetration rates, as our revenue increases to higher levels, and as we experience increased competition,’ Facebook said. ‘As our growth rates decline, investors’ perceptions of our business may be adversely affected and the market price of our Class A common stock could decline.’

Here’s the S-1 filing.

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-- Andrea Chang

Twitter.com/byandreachang

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