Tuesday, May 15, 2012

Facebook IPO: 3 Things To Remember

Facebook Going Public

Mark Zuckerberg, Facebook's young CEO, turns 28 this week. His social network company is about to go public with a total value expected to be in the $100B range. Facebook is bound to experience change as a result. There are rumors about Facebook "app stores" and "paid posts" that are treated with priority.

We can talk about whether Facebook has real assets, or whether their ad revenue per user warrants an evaluation that approaches $100B. We can argue about Facebook and privacy, or whether some other social network will do to Facebook what Facebook did to MySpace. But there are a few things that are not up for any real debate. Facebook is a big deal in today's world, and no other single web service can boast 500+ million users. Few, if any, have the engagement of Facebook, with typical users spending many hours every week on Facebook.

Here are 3 things to keep in mind as the IPO approaches:

  1. Facebook will make profits priority one. When a company is publicly traded, it has a responsibility to shareholders. Facebook will now have to satisfy Wall Street and make money for investors, so it can't continue to operate based only on what Mark Zuckerberg thinks is cool. Recognizing that, we can expect to see Facebook change as a company, even with Zuckerberg still holding a majority stake and maintaining control.
  2. Facebook will get more mobile. A frequent knock on Facebook is that they haven't fully figured out how to monetize the mobile Facebook experience. In a world in which mobile access to Internet services is rapidly overtaking desktop access, Facebook knows they have to get mobile. How will they do it? Better ad deals? A Facebook phone? Facebook mobile payment plans? Keep an eye out. Facebook is sure to make a move to get more mobile.
  3. Facebook won't make you rich. You'll make Facebook rich. Mark Zuckerberg and Sean Parker get rich. You and I probably don't get to buy stock, and if we do, we won't get rich doing it. Mark and Sean will get rich, of course. To quote Sean Parker (or at least his character in the movies), "A million dollars isn't cool. You know what's cool? A billion dollars.
Are you going to try to buy some Facebook stock? Do you have a prediction on the future of Facebook as a company? Leave a comment and let us know.


Thanks for reading! A blog works best with active participation. If you enjoy this blog, please give it a +1 and leave a comment. Share it on Twitter, Google+, or Facebook. More readers will drive more discussion.


  1. Well, I won't be buying stock. But here's an interesting blog post about what perhaps FB should be doing. http://smoothspan.wordpress.com/2012/05/16/facebooks-next-business-model/

  2. Let's all chill on Facebook and let Zuck suggest how we can spend our money (together) :)