Facebook Inc will increase the size of its initial public offering by 25 percent to raise about $15 billion, a source familiar with the matter said, as strong investor demand for a share of the No.1 social network trumped ongoing debate about the company's long-term potential to make money.

Facebook, founded eight years ago by Mark Zuckerberg in a Harvard dorm room, will add about 85 million shares to its IPO, floating about 422 million shares in an offering expected on Friday, the source told Reuters on Tuesday, declining to be identified because the information was confidential.

The expanded size, coupled with Facebook's recently announced plans to raise the IPO price range, would make Facebook the third-largest initial share sale in U.S. history after Visa Inc and General Motors.

Facebook declined to comment on the increased offering size, which was first reported by CNBC on Tuesday.

The social networking company is drumming up massive demand for the IPO even as slowing revenue and user growth spur questions about the long-term Facebook story.

"This is much more a spectacle, a media event and a cultural moment than it is an IPO," said Max Wolff, an analyst with GreenCrest Capital. "This is not a game of models and fundamentals at this point."

Earlier on Tuesday, General Motors said it planned to pull out of advertising on Facebook, underscoring worries about revenue growth.

GM's announcement, while ill-timed, should not seriously hurt Facebook's IPO reception for now as it may not be representative of advertisers' overall attitude, said Brian Wieser, an analyst with Pivotal Research Group.

"The demand for the IPO probably won't be affected materially by this," said Wieser. But he noted that there were probably a lot of calls between underwriters and investors following GM's announcement.

The IPO, Silicon Valley's largest, eclipses the roughly $2 billion debut by Google Inc in 2004.

Facebook raised the target price range to between $34 and $38 per share in response to strong demand, from $28 to $35, according to a Tuesday filing.

That would value the company at roughly $93 billion to $104 billion, rivaling the market value of Internet powerhouses such as Amazon.com Inc, and exceeding that of Hewlett-Packard Co and Dell Inc combined.

The increased price range made it very unlikely that Facebook shares would double on their first day of trading as they might have if the company had come out at the low end of its initial price range, Wolff said. He expects a first-day gain of about 10 percent.

"No rational person thought they were buying the stock for $28," said Wedbush Securities analyst Michael Patcher, noting that Facebook had traded as high as $44 in the secondary markets in recent months.

Facebook said in its latest filing that it arrived at the higher IPO price range after one week of marketing the offering -- part of a cross-country road show in which CEO Zuckerberg has taken the stage to lay out his vision for the company's money-making potential and its top priorities.

The price range hike, coupled with strong results from Internet and social media players Groupon Inc and China's Renren Inc overnight, contributed to a dotcom rally on Wall Street on Tuesday.

Shares of Pandora Media Inc rose 10.3 percent to close at $10.83, while Zynga Inc was up 7.7 percent at $8.56. Groupon climbed 3.7 percent to $12.17, while Renren gained 6.4 percent at $5.84.

Yelp Inc stock was up 3.8 percent at $20.80.

One of the biggest tech lawsuits to date is going to trial on Monday in San Francisco. It is Oracle vs Google, as Oracle claims Google violated several patents and copyrights.

Oracle is claiming $1bn (£630m) in compensation from Google. What's the problem you may be asking? The Java developer thinks that Google's Android system infringes intellectual property rights in relation to the programming language used in the platform.

To explain further, Java was released back in 1995, and allowed software to be run across different computer platforms. Then Oracle inherited Java after it took over from Sun Microsystems aka Java's original developer. The language used in Java can be found in PC game Minecraft, and could probably be seen on other games and software like Partypoker.

In its first quarter of selling its own tablet computers, Amazon.com has become the second-biggest seller of the increasingly popular mobile devices in the United States by stealing market share from the still-dominant leader, Apple, according to projections.

Norwegian developers have created one of the world's smallest computers on a USB-like stick.

The device, dubbed "Cotton Candy", allows users to turn any screen on a computer, laptop, tablet or smartphone into a terminal that accesses the stick's operating system, cloud services and apps.

IT MAY be a sign of the times that an increasing number of Bleeding Edge's friends and colleagues frequently occupy a territory called Elsewhere, in which so many of the resources one requires exist in a remote location.

Toyota's president unveiled a futuristic concept car resembling a giant smartphone to demonstrate how Japan's top automaker is trying to take the lead in technology at the upcoming Tokyo auto show.

APPLE has lost a request for a court order in its attempt to block sales of Samsung's 4G smartphone and Galaxy Tab 10.1 tablet computer, according to a ruling that was posted on a court docket and then removed.