Facebook targets huge IPO

“Facebook Inc. is inching closer to an initial public offering that it hopes will value the company at more than $100 billion, according to people familiar with the matter,” The Wall Street Journal is reporting tonight.

“The social networking firm is now targeting a time frame of April to June 2012 for an initial public offering, said people familiar with the matter. The company is exploring raising $10 billion in its IPO—what would be one of the largest offerings ever—in a deal that might assign Facebook a $100 billion valuation, a number greater than twice that of such stalwarts as Hewlett-Packard Co. and 3M Co.

“Facebook is looking to go public between April and June 2012, with a possible filing by the end of this year.

“A Facebook IPO has been hotly anticipated for several years, and viewed as a defining moment for the latest Web investing boom. The company has been vague about whether it would even make such an offering and silent on timing of an IPO. ‘We’re not going to participate in speculation about an IPO,’ said Facebook spokesman Larry Yu.”

The rest of the article is here.

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Jeff Pelline is a veteran editor and award-winning journalist - in print and online. He is publisher of Sierra FoodWineArt magazine and its website SierraCulture.com. Jeff covered business and technology for The San Francisco Chronicle for years, was a founding editor and Editor of CNET News, and was Editor of The Union, a 145-year-old newspaper in Grass Valley. Jeff has a bachelor's degree from UC Berkeley and a master's from Northwestern University. His hobbies include sailing and trout fishing.
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11 Responses to Facebook targets huge IPO

  1. JOHN STOOS says:

    Valuing a “net” company at $100 BILLION reminds me of the tech boom in the 1990′s.

    John

    • Douglas Keachie says:

      There are more Facebookers than there are evangelicals, and the growth rate and increasing time online are astonishing.

      • Tony Waters says:

        Douglas,
        The church has been running as something of a non-profit for thousands of years, and I suspect it will be around in a 100 years or so, and so will evangelicals.

        I would not make the same prediction for Facebook, which I suspect sometime in the next few decades will join Netscape, Pets.com, electric typewriters, PanAm, the Erie Canal, and the railroads as yesterday’s wonder!

        Tony

    • jeffpelline says:

      Beats the world nowadays!

  2. JOHN STOOS says:

    Douglas,

    True enough, but how many of those facers are evangelicals?

    Thinking of this as a hundred BILLION dollar company is like think that a modest three or four bedroom home is worth a half a million dollars like we did a few years ago.

    I guess we can think of those 90′s as the good old days, but I suspect that folks in the early part of the 1930′s thought the same about those roaring 20′s.

    John

  3. Steve Frisch says:

    I think this is actually a fascinating issue. Facebook’s ‘product’ form a traditional market perspective would be its interface, technological backbone, systems, staff, contacts, etc. But a social network is really the classic definition of social capital, and how does one value social capital?

    The product is really the identity, connectivity, closeness of connection, interdependence, common interests, etc. of the people who use Facebook. The value is the social network itself, because the technological interface that connects the network will be constantly changing. How do you value something as ephemeral as connection?

    For the first time I can remember we have a company that is essentially placing a value on social capital. What would the value of the “old neighborhood” be if one calculated the connections, opportunities, favors, advice, cultural affinities, sense of security and well being that came from it? or a church? or a fraternity? or your high school friends?

    Hmmm…what Mark Zuckerberg has succeeded in doing is commoditizing the ephemeral and its value will be determined ultimately by what people believe that ephemeral thing is really worth. No better way than an IPO. It is essentially an auction.

  4. Brad Glasse says:

    Just what does Facebook manufacture?

    Do they “manufacture” social interaction?

    I have to wonder about how people “value” this type of “manufactuing” in this day & age.

    • Steve Frisch says:

      That is what makes this really fascinating to me. How do we value social interaction? But clearly we know that the contact we made in high school that led to our first great job after college has value, right? Or the help we received from friends in our church when our mom was sick has value, right?

      So what are the metrics for valuing Facebook? Will the market create real metrics? And if Facebook has value due to social interaction does that mean that every other enterprise now has a new metric that adds value to its activities? Talk about disruptive potential. This will be fascinating to watch.

  5. Douglas Keachie says:

    If you take what you know about FB, and the potential for enhancing the revenue of companies possibly not even in current existence, by virtue of suggesting what such companies might have as a product or service, and then add in the obvious demographic clustering capabilities for advertising services of existent products, and then add in a big dash of the following:

    http://news.discovery.com/tech/supercomputer-predicts-civil-unrest-110908.html

    You are looking at a one trillion plus company, and, “BRAVE NEW WORLD.”

    • Douglas Keachie says:

      In short, for the first time, we are looking at molding the products and services to the customers’ nacent desires, instead of trying to persuade the customer to buy what we’ve already produced.

      Because the manufacturer/service provider can literally get into the heads and mindsets of selected potential customers, the potential for profits is enormous.

      It also means that if I adopt a totally separate false identity, and use the best anonymizing capabilities out there, I will still be found by potential sellers simply by them knowing who my various circles of non anonymized friends are.

      If you weren’t into sociology/anthropology/psychology before, welcome!

  6. Michael Rogers says:

    I would be cautious about putting the nest egg in Facebook. I see its Achilles Heel being the privacy issue and they are vulnerable to a company figuring out a way of offering privacy and profits. Also, as I see it collaborative networking will be to social networking what Facebook was to email.

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