Prior to Facebook‘s (FB) controversial $16.5 billion listing, it was revealed that the social networking giant had begun experiencing a slowdown in advertising profits even as its user base continued to expand.

That revelation subsequently triggered a reduction in profit estimates by analysts of one of its lead underwriters, Morgan Stanley (MS), which may have shared that information with select institutional investors.

Beyond the obvious allegations of wrongdoing by Morgan Stanley and Facebook, the real question that investors need to ask themselves is: “What’s the outlook for Facebook’s advertising revenues and what are its alternatives going forward?”

More than any of the current hype and controversy surrounding Facebook, that is what will drive its stock price going forward.

Let’s take a dive into Facebook’s numbers:

1. Based on the numbers that Facebook released in its S-1 in the run-up to its IPO, it can be inferred that it earns roughly $5 a year from each of its 845 million active users.
2. Assuming a rate of user growth of 17.5% per annum, Facebook should have at least 1.6 billion users by 2015 – which means that, based on a $5 average revenue per user, its profits will have risen to $8.2 billion by then – for a compound average growth rate of 31%.

That’s a huge if. Facebook is seeing its market growth rate in the United States slow considerably. A report from an online marketing analytics firm, eMarketer, suggests that Facebook’s U.S. growth rate will drop to 6.6% this year and fall to 3.9% and 3.6% in 2013 and 2014, respectively.To continue reading, click here.