Nevermind The Man behind The Curtain
The Facebook initial public offering of stock appears to be coming soon (no really) and eager buyers are already seeing dollar signs in their eyes.
But beyond the value of the Facebook stock is another reason to rejoice: as a publicly traded company the ‘public’ will finally get to see how they have been making their money and how much, exactly they have made.
This is a big deal, especially for up-and-coming social media networks who want to know how the sausage is made. As a private company Facebook has kept their cards close to the vest, so to speak, reluctant to reveal too many details about how much money they have been making (estimates put the number at more than $3.5 billion in 2011 alone) and what they have been doing with that revenue.
The fact is, for all the big talk swirling around about Facebook nobody has the first clue what their business model actually is; what revenue streams are the most profitable for them, what paths, going forward, make the most sense for them. Once Facebook has investors to satisfy this information will finally be revealed.
If Facebook files their IPO papers this week their stock could start trading in a few months. It’s possible the IPO will help the company raise $10 billion. The entire stock offering might put the company’s value somewhere between $75 billion to $100 billion, nearly one-quarter the value of Apple ($400 billion) not the world’s most valuable company.
Media baron Rupert Murdoch weighed in on Twitter: “Facebook a brilliant achievement, but $75 – 100 bn? Would make Apple look really cheap.”
Gans disagrees. “Facebook is already one of the most successful products of all time. It’s hard to think of a company that has that many customers. There’s Microsoft and Coke and it gets harder after that,” he said.
A decade ago, the search for information dominated the Internet. Now the emphasis is on connecting with others, Levy said.
As a result social media, which had been perceived as largely trivial, is evolving into its own platform for business, employers and advertisers.
“The fact that Facebook is engaging in an IPO now illustrates that social media is transitioning very rapidly from an object of fringe curiosity to a mainstream tool of the Internet and a major destination for most of us everyday,” Levy said.
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