Investors from around the world experienced dismay when Facebook disclosed that its Initial Public Offering (IPO) will not be until 2012.
Facebook now attracts more attention from potential investors than does Google, many might say. With more than half a billion users and private investment in Facebook at an all time high, some hoped that an IPO would come sooner rather than later.
> The Obama economy
Although Facebook appears ready for an IPO now, some suggest that concerns over volatile market conditions and the Obama economy require the postponement of its IPO in hopes of achieving a higher valuation. Present indicators seem to suggest that the value of Facebook has nowhere to go but up.
Facebook is not the only corporation putting IPO plans on hold in hopes of outlasting current economic conditions. At the end of last month, SurgiVision became one of the latest to announce a rethought strategy after disappointing results in preliminary value estimates.
While awaiting fairer economic times, Facebook hopes to use the time to grow and increase its current base of private investment.
> The risk of delay
By delaying its IPO, Facebook may face additional risks along with its potentially higher value. Some analysts see competition from other social networking venues such as Twitter intensifying over the short term, especially in the battle over advertising dollars.
Facebook CEO Mark Zukerberg, seemingly perpetually under fire for the controversial nature of his business strategies, could self destruct at any time. Privacy lobbyists, already having a heyday over the egregious privacy and security issues that haunt Facebook, could also use the time between now and 2012 to subvert the popularity Facebook has enjoyed.
Although presuming that Facebook users will remain detached from the threats they encounter through the use of the site could end up costing the company billions, the fact that privacy and security matters have little or no traction within our society tends to confirm that Facebook faces no real danger in that arena.
> The new Online landscape
Changing winds in the Online corporate world reflect the way our entire society now seems to value social networking over more traditional services such as Internet search results, email, and voice communications. Not too long ago, Google seemed like an unstoppable force set to dominate the Online world for decades to come, but now has seen its stock value collapse as the economy and changing public preferences have taken their toll.
Before Google gained prominence, Microsoft seemed like the unstoppable force; before that there were computer manufacturer powerhouses like Dell and HP. Before that was IBM.
Time has shown us that – as in the traditional business world – no business can plan on prolonged dominance, regardless of the desires of its top brass. With a public so demonstrably fickle, especially in the technology world, one can only hope that the delay of the Facebook IPO pays off as planned.
Heera, Sarabjit. Facebook is now $33 billion entity . August 29, 2010. http://topnews.us/content/224881-facebook-now-33-billion-entity (accessed September 8, 2010).
Shwiff, Kathy. SurgiVision Postpones IPO Because Of Market Conditions . August 30, 2010. http://online.wsj.com/article/BT-CO-20100830-711665.html (accessed September 8, 2010).