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Facebook Sees Possible Problems From Future IPO

Nov 29 2011

DAVOS-KLOSTERS/SWITZERLAND, 30JAN09 - Mark Zuc...

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Social media giant Facebook is slated to IPO in the spring or early summer of 2012, and this change will carry the requirement of public financial records. According to some experts, the company could possibly see a $10 billion gain at a valuation of up to $100 billion. The company has not yet chosen a specific bank for this endeavor, and some financial experts wonder how the IPO will affect the way Facebook does business in the long run.

CEO Mark Zuckerberg has kept to the strategy of focusing on user experience over other factors such as ad real estate. Being conservative with monetization has worked so far, although some stockholders present possible problems as far as continuing this approach. Pushing the company to be more aggressive with advertising could eventually lead to an altered user experience.

Facebook's long-term plans are projected for up to 10 years in the future. Some decisions cause user discomfort when a new feature is unexpectedly launched. The site is also at the forefront of trends such as social sharing of various offline activities.

The move for Facebook to go public may have several reasons other than the company's following of established shareholder rules. It may also be a strategy for keeping a certain level of liquidity for high-ranking employees. The possible risks concern what could happen to that stock if it falls into the hands of people who may not follow Facebook's forward-thinking philosophy. Potential setbacks such as disrupted user behavior could make Facebook more vulnerable to competitors.

   
    
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