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<html> <head><style type ="text/css">body { font-family: "Bloomberg Prop Unicode I", Verdana, sans-serif; font-size:125%; letter-spacing: -0.3pt; color: #FF9F0F; background-color: #000000; text-align: left; } p {line-height: 1.25em; max-width:900px; width:expression(document.body.clientWidth > 900? "900px": "auto" );} h1, h2, h3 { text-align: left; font-weight: normal; color: #FFFFFF; } h1 { font-size: 130%; } h2 { font-size: 115%; } h3 { font-size: 100%; } #bb-style { font-size: 90%; max-width:900px; width:expression(document.body.clientWidth > 900? "900px": "auto" ); } b, strong { font-weight: bold; } i, em { color: #FEC54A; } pre { font-family: "Andale Mono", "Monaco", "Lucida Console"; letter-spacing: -0.3pt; line-height: 1.25em; } table { border: 0; font-size: 90%; width: 100%; margin-left: auto; margin-right: auto; } td, tr { text-align: left; } td.numeric { text-align: right; } a:link { color:#53B2F5; text-decoration: none; } a:visited {color:#53B2F5} a:active {color:#53B2F5} a:hover {color:#53B2F5} </style> </head> <body> <p>By Francis Wilkinson</p> <p>In the next few years, Facebook's biggest cheerleaders may be found not on Wall Street but in Sacramento.</p> <p>California's Legislative Analyst Office just issued an updated <a href="http://lao.ca.gov/analysis/2012/update/economic-revenue-update-022712.pdf">report</a> on the California economy, including projections for the next few years of state revenues. For the most part, it offers the kind of sober analysis one expects from a government bureaucracy, citing a host of problems holding back economic growth, including "persistent joblessness" and a "very troubled" housing market.</p> <p>But the LAO report is hardly all gloom. "Wage and salary employment has increased at a healthy clip in recent months," it says, and profits at many California-based companies have been booming; for its most recent quarter, Apple Inc. reported earnings of "about $1 billion per week."</p> <p>As a source of giddiness for the green-eye-shade crowd, however, Apple could yet be eclipsed by Facebook Inc. The company's highly anticipated initial public offering is <a href="http://www.bloomberg.com/news/2012-02-23/facebook-insiders-limit-ipo-by-pushing-100-billion-value-tech.html">expected</a> to produce a market capitalization of around $100 billion and generate "substantial capital gains and other income for a small number of Californians and, in so doing, generate additional tax revenues over the next few years."</p> <p>How substantial? The LAO acknowledges "a very large range of error" in its forecast. But presuming Facebook goes public this spring, LAO projects $500 million in Facebook-related revenue in 2011-2012 and another $1.5 billion in 2012-2013. All told, the LAO envisions $2.4 billion for the state through 2014-2015. "Should the IPO proceed," the report states, "it appears virtually certain that the state revenue impact will be at least in the hundreds of millions of dollars, spread across a few fiscal years."</p> <p>If the stock soars, the report states, "the state revenue benefit could be $1 billion or more over the level we assume, spread across a few fiscal years."</p> <p>If only Washington had a magic revenue pony of its own.</p> <p>(Francis Wilkinson is a member of the Bloomberg View editorial board. <a href="https://twitter.com/#!/fdwilkinson">Follow</a> him on Twitter.)</p> <p> </p> </body> </html>