Monday, June 18, 2007

Facebook to go Public?

I used to be big into stocks. Ok, as big as a 14 year old with a Wall Street Journal can be. I am sure by now most of you are familiar with Facebook. The online social site originally developed for college students, then opened to high school students and now open to everyone. The site, similar to MySpace is reportedly making a $100 million in ad revenue.

Recently the social networking utility made internet headlines by opening up its structure to allow for open development and implication of 3rd party applications. Now it's entering the rumor mill as a potential for a public company. Paul Kedrosky, "a venture capitalist, media personality, and entrepreneur," suggests in his blog "Infectious Greed" that the company may release an IPO in August.

What possible motivation could the company that supposed $100 million company have for going public? It doesn't appear that Mark Zuckerberg wants to sell, with even more rumors abound of Google offering an astounding $2.3 Billion (Ok, so that figure comes from Wikipedia, but if YouTube went for $1.7 billion, is $2.3 that far off?).

The question could be then passed off as, what does Mark Zuckerberg want with extra capital? What could the Big Z be planning to do that would require additional millions of dollars in capital? It goes without saying that the extra capital would probably not be enough to buy any major company with a more firm foothold on the economic ladder, something the size of Apple, Google, or Microsoft is out of Facebook s hands by a number somewhere in the billion dollar stratosphere.

Is the strategy to buy lots of smaller companies and expand his empire beyond Facebook like the Google strategy, or is he just looking to become really rich ala Microsoft? The tangents that could be derived from this potential scenario are almost endless. We shall see in August if Mr. Kedrosky's opinion of an IPO is true.

[Read] Infectious Greed

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