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Jun-30-2008

Facebook IPO in the near future?

Rumors are circulating that Facebook are fighting off the billion dollar acquisition offers and that they will present their IPO real soon. In case you don´t know, Facebook.com is social networking website with free access, and users can join networks organized by city, workplace, school, region, etc to connect and interact with other people.

It´s 150 million dollar per year ad revenue is a promising start, but is still far away from reaching to the 1 billion dollar revenue of Yahoo! But Facebook has only two years of existence, and it is evolving rapidly; the social network has more than tripled the number of active members to 70 million from about 20 million in April 2008:

 facebook-evol.jpg

A Reuters article commented that Mark Zuckerberg, Facebook’s founder and chief executive, has remained mum on the social network’s IPO plans, except to tell CBS’s 60 Minutes in January that a 2008 IPO is “highly unlikely.” That hasn’t stopped bloggers and investors from interpreting Facebook’s every move as preparation for an eventual public offering.

That Facebook has been steadily expanding its ranks — it now employs 550 people, according to the company — and recently hired a string of Google Inc (stock quote: GOOG) executives, including Sheryl Sandberg, Google’s former sales chief who is the new Facebook chief operating officer, has only fed the speculation.

Facebook’s popularity is so immense that “despite the lackluster IPO market, if they chose to go public tomorrow, they could,” Davis said at the Reuters Summit.

 The possibility of having targeted advertising (for instance, select the group of American male between 20 and 25 years old that live in California) is a good advantage over other companies as Yahoo!, and companies can choose their targets, so if Facebook does massive advertising and negociates with large companies, success in inevitable.

Some analysts believe Facebook is worth $4 billion, others say up to $15 billion. The fact is that Facebook going public is a rumor circulating fastly, and they have enough investors to have a promising IPO.

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Posted under US Stocks
  1. CelpPlult Said,

    Thanks !

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