[TheKingdom2000]

Facebook Files to Going Public, So What Does It Mean for You? | FOX8.com (http://fox8.com/2012/02/01/is-facebook-going-public-2/)

On Wednesday, Facebook filed documents with the Securities and Exchange Commission for a $5 billion IPO or initial public offering of stock, according to CNN.

Not sure what a $5 Billion IPO means though...

If you “like” Facebook, you may love the fact that the company is going public.
On Wednesday, Facebook filed documents with the Securities and Exchange Commission for a $5 billion IPO or initial public offering of stock, according to CNN.
So what exactly does this all mean?

CNN Business Correspondent Christine Romans explains, “It’s when, say I own a hot dog stand and my hot dog stand is getting bigger and bigger and I need new investors to meet up the demand. So I go find an investment banker and I say sell shares to the public cause I would like them to invest in my hot dog stand.”

The social network was conceived in a Harvard dorm room by Mark Zuckerberg in 2004.
Facebook now has 800-million followers.

The company made most of its money through advertising and had never released its financial statements because it was a privately held company.
As a result, there’s no telling exactly how much Facebook’s stock will be worth on the open market. But experts predict based on estimates alone, it’s reported IPO stock will be one of the largest in history.

Once Facebook goes public, investors would not be able to buy shares right away. It will be at least two months before anyone could get a piece of the world’s largest social networking site.

[pastarocket]

IPO is scheduled for the third week in May.

A Wall Street Daily article about avoiding the Facebook IPO. Your thoughts on the article?

Three Reasons to Avoid the Facebook IPO | Wall Street Daily (http://www.wallstreetdaily.com/2012/01/18/three-reasons-to-avoid-the-facebook-ipo/)

[ntan]

we can finally see the actual revenues of fb soon =)

$5B IPO relatively low for FB.. probably gauging investor interest?

[taylor192]

IPO is scheduled for the third week in May.

A Wall Street Daily article about avoiding the Facebook IPO. Your thoughts on the article?

Three Reasons to Avoid the Facebook IPO | Wall Street Daily (http://www.wallstreetdaily.com/2012/01/18/three-reasons-to-avoid-the-facebook-ipo/)

Facebook earnings have not topped $2B, and the only way to earn more is to be more intrusive with ads, which will slow growth. Sales (apps, gifts, ...) have not generated very much for Facebook, and I doubt will.

I think the analysis is spot on. It'll be bid up too high and come back down as reality sets in.

[Firmware]

fuck facebook

[CP.AR]

with MOST web-based firm, their IPO is always put stupidly high because their "userbase" dosen't directly translate to a high profit margin or corporate efficiency.
Look at the dotcom crash - the exact same thing (except the crash was amplified by a hold-out period)


Trust me, I ran the regressions

[Gridlock]

and this will be what kills facebook.

This is why they have put it off for as long as possible.

A-going more "corporate" makes things less "cool". Pressure to drive the stock up means as Taylor said, more ads and more money.

B-Everyone gets a look at the books. Don't even need to own a share.

[unit]

Facebook Files to Going Public, So What Does It Mean for You? | FOX8.com (http://fox8.com/2012/02/01/is-facebook-going-public-2/)

On Wednesday, Facebook filed documents with the Securities and Exchange Commission for a $5 billion IPO or initial public offering of stock, according to CNN.

Not sure what a $5 Billion IPO means though...

if they release 100,000,000 shares (shares outstanding) @ $50 a share that would be 5 billion.

most internet IPOs have done poorly lately.
linkedin, groupon, just to name a few.
the more hype an IPO has the more likely it'll get shorted.

[Sky_High]

The social network was conceived in a Harvard dorm room by Mark Zuckerberg in 2004.
Facebook now has 800-million followers.

:lawl:

[punkwax]

Facebook · where pedobear may find out where you live, where you hang, who you hang with, what your family looks like, where you go to work / school, events you're attending... The list goes on and on...

Yep, gonna invest in that...

[PiuYi]

and this will be what kills facebook.

This is why they have put it off for as long as possible.

A-going more "corporate" makes things less "cool". Pressure to drive the stock up means as Taylor said, more ads and more money.

B-Everyone gets a look at the books. Don't even need to own a share.

don't think it'll KILL facebook... fb still generates tons of money through ads, but it'll definitely show how over-valued it is

the key is that there's not much more room for future growth to legitimize that valuation, fb is reaching its ceiling so unless it can find new areas to generate revenue, it'll be a dud stock

[tiger_handheld]

facebook will be the next groupon -- feel bad for the suckers that went in at IPO. At most , facebook / groupon will be novelty stocks.

[drunkrussian]

and this will be what kills facebook.

This is why they have put it off for as long as possible.

A-going more "corporate" makes things less "cool". Pressure to drive the stock up means as Taylor said, more ads and more money.

B-Everyone gets a look at the books. Don't even need to own a share.

i tend to disagree. at first i saw that yes, there's no way their user base is gonna grow very much, with them having nearly a billion users and there being 7 billion people in the world

then i read that their revenue is 85% based off advertising and they only have a 1% share of the online advertising market. so really it's about taking their existing user base and monetizing it. From what i see, they barely monetized it right now and with their demographic profiling giving them the ability to serve the ads far better than google, i see huge potential.

PS
the other 15% is commision from online games based on fb such as farmville or whatever the fuck. As long as dumbass kids and annoying people exist, that's gonna grow as well :troll:

[Gridlock]

i tend to disagree. at first i saw that yes, there's no way their user base is gonna grow very much, with them having nearly a billion users and there being 7 billion people in the world

then i read that their revenue is 85% based off advertising and they only have a 1% share of the online advertising market. so really it's about taking their existing user base and monetizing it. From what i see, they barely monetized it right now and with their demographic profiling giving them the ability to serve the ads far better than google, i see huge potential.

PS
the other 15% is commision from online games based on fb such as farmville or whatever the fuck. As long as dumbass kids and annoying people exist, that's gonna grow as well :troll:

THUS...more advertising pisses off more users thus someone starts the "next" facebook and thus....kills facebook? Welcome to my point ;)

Myspace was unstoppable. NewsCorp bought it for how many billion? Then...it died. Newscorp was the opposite of cool, and they wanted a ROI. Stock investors also want a ROI. That'll make them equally "uncool".

Really the only thing the IPO does is allow a bunch of people to cash out. Even then, there are restrictions.

[drunkrussian]

^i don't know if comparing fb to myspace is any good. Myspace was miniscule - i don't know a single person who used it. I would compare FB's potential to google. I work in online marketing and the trend is to switch from Google Adwords to FB Ads in consumer advertising. The reason - google you pay per click and fb you pay per click, but with FB you can target the userbase based on dozens of factors, whereas google only looks at keywords.

In terms of your point of users dropping off due to ads - i don't see it as well. I think it has gotten to a point where it is an essential service, and users are already using it and not minding the little ads on the side. Everytime they change the privacy settings, every bitches but barely anyone drops off. New users are coming in everyday - when someone reaches a certain age, BAM they're on FB. All FB has to do now is grow the trend of advertisers buying in, and making their advertising system more sophisticated. Thye don't need to implement any changes to their existing interface or business model to do this.

I'm not a hippie who thinks google and fb will always be around - i just think they're both safe for quite the next little while. I think they waited so long for the IPO because htey needed both the earnings, the revenue model and the userbase to be locked in to a point where monetizing it to a greater extent will not change things very much.

i do agree that eventually there will be a "new" facebook (twitter is already doing it and there are dozens of copycats in other countries), but everytime someone does something original facebook replicates it and integrates it into their better platform with more users. So thus far they're been quite good at competing and domionating in this sense

[unit]

i think fb is here to stay for a long time.
its unlike friendster and whatever was before it.
its almost too big to fail at this point.
the "next" fb will have to innovate beyond something fb can easily replicate.
i think were going to see fb for at least another 10 years.
i thought g+ would be big because they are pushing it on all new android phones, and android dominates the market, but right now its still 1/100th what fb is and its not like people dont know what it is.

[sindragon]

Just a little comparison to be cautious of:

Google:

Revenue: 38 Billion
Profit: 9.7 Billion
Total value of All Shares: 188 Billion

Apple:
Revenue: 109 Billion
Profit: 26 Billion
Total Value of All Shares: 425 Billion

Facebook:
Revenue: 2.5 Billion
Profit: 700 Million
Proposed Total Value: 85-100 Billion

So just saying Beware of that. It's Trying to get Valued at over Half of Google's Value...with less than 1/10th its Revenue and Profits.
Can Facebook grow 500% faster than Google?
Can it grow 1000% faster than Apple?

So ya, don't get too excited and put all your money in something like this.

Even if nothing goes wrong, and it keeps growing...how much bigger can it reasonably get?

[Gridlock]

Google+ isn't going to take off because its a facebook clone. In that sense, facebook has staying power, because why am I going to switch to "not facebook" when I can just be on facebook?

People originally signed on to facebook because of real names and standard inferface, instead of myspace's well...shitshow design. I would see its next competitor going back to a system with more individual control in some standardized format. In my mind, that should have been google's take on social networking. Think of the marketing if, "you are an individual, shouldn't your page reflect that?" PLUS(oh, thats why they could call it plus) it would be difficult to integrate that into FB's business strategy because it would be such a big change. Google should hire me.

The next problem facebook will have is boredom of the platform. People will change to something just because its new and key difference from +, different.

PS, myspace was huge in the states. No one cares about Canada. Yippee, we'll gain a percentage of 30 million people.

[RRxtar]

Honestly, I dont think the potential of Facebook has even been scratched. I can imagine it being THE main business directory in the future. where every business (well, most) has a page (costs money) and you search for services thru facebook, not look in the yellowpages.


didnt they just make a change where businesses can no longer be a 'group' and now need to have a business page? first step right there

[AWDTurboLuvr]

It's actually great for businesses to be on Facebook. The ability to instantly connect with a large group of your clients, is not found anywhere. People offer up suggestions either thru the wall or a quick message. The interface is incredibly versatile. Want to just use Facebook to post your drunk, party photos? Sure, but you can also use it as part of your marketing strategy and could be a great tool in terms of PR.

[unit]

my only problem with fb is the lack of privacy features.
if you have a page on there, they want you to be found.
its not made for ppl to use in private circles, but rather for people to connect with everyone they know.
i made a new account with a fraction of the people as my old one, and even with all privacy features turned on, i still show up on peoples sidebar as "people you may know".
huge turnoff for me in a world that gets less and less private all the time.

[conflagrare]

Not sure what a $5 Billion IPO means though...

$5 billion IPO means Mark Zuckerberg will have $24 billion dollars in Facebook shares.

[SkinnyPupp]

A lot of people are going to become very rich.. like the graffiti artist who painted their office walls with art, in exchange for shares.. His shares will be worth $200 million.. not bad for a paint job! :ahwow:

[Gridlock]

It's actually great for businesses to be on Facebook. The ability to instantly connect with a large group of your clients, is not found anywhere. People offer up suggestions either thru the wall or a quick message. The interface is incredibly versatile. Want to just use Facebook to post your drunk, party photos? Sure, but you can also use it as part of your marketing strategy and could be a great tool in terms of PR.

:okay: My business page has 31 fans...and dino had to ask people to join so I could name it. :rukidding:

[Culverin]

Honestly, I dont think the potential of Facebook has even been scratched. I can imagine it being THE main business directory in the future. where every business (well, most) has a page (costs money) and you search for services thru facebook, not look in the yellowpages.


Well, the thing is, neither has G+, except google is mostly sitting on their asses about it. I expected a lot more from Google.
Everybody has a gmail account already. It should have been simple for them to turn G+ into your Google Hub. Except, well, they have been really bad about integrating their services under 1 banner for the user.

[DC5-S]

fuck facebook

in the face

[goo3]

Just a little comparison to be cautious of:

Google:

Revenue: 38 Billion
Profit: 9.7 Billion
Total value of All Shares: 188 Billion

Apple:
Revenue: 109 Billion
Profit: 26 Billion
Total Value of All Shares: 425 Billion

Facebook:
Revenue: 2.5 Billion
Profit: 700 Million
Proposed Total Value: 85-100 Billion

So just saying Beware of that. It's Trying to get Valued at over Half of Google's Value...with less than 1/10th its Revenue and Profits.
Can Facebook grow 500% faster than Google?
Can it grow 1000% faster than Apple?

So ya, don't get too excited and put all your money in something like this.

Even if nothing goes wrong, and it keeps growing...how much bigger can it reasonably get?

A better comparison would be to look at the Google IPO in 2004.

2003 Income Statement
Rev: 1B
Net Income: 100M
Mkt cap: 30B or so?

Also, interesting to look back at history: Google IPO? No Thanks (http://www.fool.com/investing/general/2004/04/30/google-ipo-no-thanks.aspx)

These things are a bet on how well and to what extent you think FB will be able to monetize their 700M users and grow to reach that valuation, just as it was a bet on how well Google would do the same with search. Numbers alone don't tell the whole story. There was no history with search, and there's no history with FB's goldmine of user data.

[twitchyzero]

facebook's here to stay
and i'm still trying to figure out how to up the privacy on my timeline :joy

[gdoh]

LOL some random person called a broker that i know and told him he would like to get of Facebook IPO

[Gridlock]

I think there is a fundamental difference between google ca 2004 and facebook now.

We all know and accept that small ads are a part of the google game. We did then, and we do now.

For facebook to capitalize on their database, which is impressive btw...I could probably target an ad that would just show up on dino's wall if I wanted, but she already uses my shit, they need to break a bit of confidence.

It's not rocket science on how to make that thing a money printing machine. So far no ads show up in the newsfeed(sponsored I should say, but any company with an fb page telling stories and showing pix IS advertising) the ads on the side are small, and so on.

I don't *think* they can do the following things: increase revenue, maintain growth and keep daily users engaged all at the same time.

I don't think I'm the first person to realize this. They have resisted an IPO until the last minute possible. The real reason for all of this is they hit 500 individual investors, meaning they need to at least release the financials publicly. The other part is people want to cash out.

I think they will have problems in the transition to a public company. People share a lot with google, but people rarely go to google for fun. I don't 'hang out' at google.ca a whole lot. That's the difference for fb.

Besides...google can start gmail, and plus and android and branch into new, profitable areas. Facebook is mobile..but its free, you don't even get ads. You may be able to branch into facebook e-mail, which they are trying but it sucks but I don't see the ability to leverage the brand into new areas.

For me adding places, and timelines and chat is more a way to keep existing users enagaged and on the site, more than winning new users to it..."fine, I'll join fb now, because I've been looking for a site to tell people where I am" or "I've been looking for a new e-mail client, so the choppy, buried mail/messages feature buried 3 pages deep in facebook is the way to go"

I don't doubt that they'll do well, but I don't see this being the next big stock to take off.

[drunkrussian]

People share a lot with google, but people rarely go to google for fun. I don't 'hang out' at google.ca a whole lot. That's the difference for fb.

^I agree, this is why for B2B marketing, people are still wary of fb as a tool to compete with google. a CEO or CIO or COO may do a google search and click on a relevant ad and do business with that company. But when they're on FB - they're probably at home, screwing around and don't want to be bothered.

with that said, for hte consumer market it's a complete goldmine. Picture a 19 year old logging into facebook and seeing an ad for Jay-Z in vancouver - they click on the ad, find out there's a show and buy tickets. Or a 45 year old married woman seeing a discount ad for expedia flights, and booking a discounted flight through Air Canada's FB page. It's a complete goldmine in the consumer market and all you really have to do these days it seems, is throw a discount on there, or make people aaware who otherwise weren't, for Facebook toget its value. With Google they would need to have the need and do a search for a flight or a concert. With FB they can find out about it for the first time just because FB knows that these are things they've updated their status on, or are attached to a page they belong to, or are in their description - rather than the user driving the need, FB is generating it based on what it knows are their interests.

[gdoh]

facebook went down for 15 mins lulz

http://www.businessinsider.com/facebook-is-down-2012-2

[K-Dub]

:okay: My business page has 31 fans...and dino had to ask people to join so I could name it. :rukidding:
share? i find it super hard to get people to like your page on facebook, even though everyone is always on it, no one wants to interact or have your business updates show up in their news feed.

it's a lot easier to gain followers on twitter though.

[highfive]

This is how I differentiate Google's and FB business model.

Google - relies on search -> people use google to look for something (flight deals) -> google shows your results, you click -> they profit. Google would keep updating their engine and make it as efficient as possible for you to search so whatever you're looking for is right at the top of your results list. This leads to more people using their search service and clicking more.

Facebook - relies on the network of 800 mln people -> they are able to smoothly connect peoples accounts to others. With that your provide your interests and personal information. -> to make more money FB have to push more ads or create more marketing exposure on the 800 mln people. IF they are able to do that without sacrificing the efficient networking between ppl, they can continue to grow. If not, it can be something that people will end up turning off to. It's almost like going to a steaming porn site and a bunch of ads comes up. Sooner or later, you're going to be fuck that i'm moving to another porn site.

[shawnly1000]

"Mr. Choe would have received something in the area of 0.1 per cent to 0.25 of the company's stock, which would now be worth about $200-million based on a $100-billion valuation."

Graffiti artist took Facebook stock, now multimillionaire - The Globe and Mail (http://www.theglobeandmail.com/report-on-business/top-business-stories/graffiti-artist-took-facebook-stock-now-multimillionaire/article2324276/)

[MindBomber]

A better comparison would be to look at the Google IPO in 2004.

2003 Income Statement
Rev: 1B
Net Income: 100M
Mkt cap: 30B or so?

Also, interesting to look back at history: Google IPO? No Thanks (http://www.fool.com/investing/general/2004/04/30/google-ipo-no-thanks.aspx)

These things are a bet on how well and to what extent you think FB will be able to monetize their 700M users and grow to reach that valuation, just as it was a bet on how well Google would do the same with search. Numbers alone don't tell the whole story. There was no history with search, and there's no history with FB's goldmine of user data.

I invested heavily in Google on the date of it's IPO in 2004, buying in at $85 a share with absolutely no hesitation. I wouldn't touch Facebook, despite the stocks being considered similar.

The important difference between Google and Facebook is simple: Google has consistently expanded, revolutionized and found significant success in each and every field it enters; Facebook is a social media site, nothing more and I seriously doubt it ever will be.

Hypothetically, a competing search engine may one day rival Google and take a portion of their market share, however unlikely that sounds. If that were to happen, Google has android, maps, street view, scholar, books, gmail, translate, plus and so on to fall back on.

Hypothetically, if a new social media site one day rivals Facebook and cuts into it's revenue, it will have nothing to fall back on and no basis for expansion. Myspace and Nexopia were early social media giants that collapsed when they couldn't adapt to a changing market with stiff competition. Facebook is becoming increasingly cluttered with useless junk, I see an opening for more streamlined sites like Twitter to continue chipping away at Facebook's market share over time.

[Synarchist]

speaking of b2b, companies like bvsn, jive and saba are rising in stock value.
especially since facebook released a statement about an ipo coming may 21st
(smart move by zucker considering he kinda had to give in either way, ipo or not)
it seems the future is in this "cloud" computing and networking (b2b, b2c, etc)
so perhaps its better to invest in the companies providing these services?
kinda like investing in the companies that own the cellphone towers rather than the cellphone companies itself

[!SG]

going public is another good way to gain capital...

who knows, maybe we'll see a facebook F1 race car or more facebook sponsored large scale events.

most businesses use facebook indirectly for marketing anyways.

[goo3]

it seems the future is in this "cloud" computing and networking (b2b, b2c, etc)
so perhaps its better to invest in the companies providing these services?
kinda like investing in the companies that own the cellphone towers rather than the cellphone companies itself

*whisper* You're a little late

[Hehe]

IMHO, FB is simply another way people communicate with their relatives (F&F)

The whole thing started back in the day with ICQ, then when AOL bought it and ceased to update, MSN messenger came along and took over. Facebook basically brought us an online version of it and record much more than just conversation history.

And I say it's all the same because I keep seeing the same problem:
When I had ICQ, I would ask every friend, and those who I first met to see if we could chat online. My account got so many friend on the list that I can't remember who's who.

When I moved to MSN, I re-organized my friends on ICQ... only those who I really talk moved to MSN. Then as I abandone ICQ, I started adding new friends to MSN, and people who I get to know would ask me for MSN too. My list again grew so big, I can hardly remember anyone if they don't keep a pic or their name in their profile/status.

Now, with FB, I use less and less MSN. I moved all the people that I had on MSN to FB... and the same thing again... people who meet me for the first time asks for my FB account. Even with some resistance, my FB still grew from the 5x people that I really care/talk to 2xx that I have no idea how they got my FB in the first place.

As far as the history goes, something someday would come along which everyone would start jumping ship... by then, FB will die down... probably not fast... but it would eventually.

So, unless FB stops being an one-trick bunny, my money would stay with GOOG or AAPL.

[drunkrussian]

This is how I differentiate Google's and FB business model.

Google - relies on search -> people use google to look for something (flight deals) -> google shows your results, you click -> they profit. Google would keep updating their engine and make it as efficient as possible for you to search so whatever you're looking for is right at the top of your results list. This leads to more people using their search service and clicking

this is incorrect. search results are based on site popularity based on number of visitors and relevant content. google makes $0 off clicks to websites and has no control over order - thats a conflict of interest. the ads on the top and side of search results are the ones google makes money off of. only 15% of searchers click on those ever and advertisers are the ones who control how much to pay for their ads and what position theyre willing to pay for; once again google does not interfiere. facebook ads are the same thing but rely on knowing who you are, rather than what ur searching for, to presentthe ad content to you.
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