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Facebook CFO Gideon Yu is out

The former Google employee will ideally be replaced by someone with experience at a public company, representatives from the social network confirmed Tuesday.

This post was updated several times as the news unfolded. The last update was at 1:01 p.m. PDT.

Facebook chief financial officer Gideon Yu is leaving the company, representatives from the social network confirmed Tuesday.

"Facebook confirms that CFO Gideon Yu will be leaving the company," a statement from Facebook read. "Gideon has played an important role in helping us achieve our financial success, building a strong finance team and establishing the core financial operations of our company. We are grateful to Gideon for his contributions to Facebook and what we are trying to accomplish."

But there's more: It looks like the reason for Yu's departure is because Facebook still hopes to be on track to file for an initial public offering.

"Despite the poor economic climate, we are pleased that our financial performance is strong and we are well positioned for the next stage of our growth," the statement from Facebook continued. "We have retained (search firm) Spencer Stuart to lead our search for a new CFO and will be looking for someone with public company experience."

The report was originally published in The Wall Street Journal.

Yu, a former Google employee who was brought on board there when it acquired YouTube, had been hired fewer than two years ago, and the Journal reported that Facebook is currently hunting for a replacement who has experience running a public company. Prior to YouTube, Yu had been employed as "treasurer" at Yahoo. He also has side projects, joining the team of high-profile investors--including the new Google Ventures--in e-commerce start-up Pixazza.

Yu was one of the first in a string of prominent Googlers to join Facebook's upper ranks as it rose to the top of Silicon Valley's pecking order. Eventually, sales chief Sheryl Sandberg joined the company as chief operating officer, and public affairs czar Elliot Schrage was hired as head of global communications.

So now it looks like Facebook's plan is to push for an IPO. With Yu at the helm of its finances, rumors had swirled for months that it was looking to raise additional venture capital funding to fuel its exponential growth. The company will likely hit 200 million members worldwide within days, a mass that requires costly hardware and personnel around the globe. Persistent reports hinted that not only was Yu attempting to drum up interest in more funding, but that he was having a tough time doing so.

Facebook's valuation was hit hard by the recession, with private stock trading dipping to lower and lower values and Forbes magazine speculating that founder Mark Zuckerberg had lost his status as a paper billionaire as a result.

In November 2007, Microsoft invested $240 million in Facebook at a $15 billion valuation. These days, Facebook is lucky if its valuation is a third of that. But it eventually became evident that the $15 billion was never a reality: Microsoft's stake was in preferred stock, and the $15 billion was a term of the deal.

Going public is a risky move for any company in a recession, particularly one that is still on the road to profitability but not there yet. But for Facebook, with the quest for more venture funding growing increasingly fruitless, it may be the best road out.