Why Facebook IPO is the Correct Path for Investors

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This is a guest post from Shannen Doherty

Facebook’s long awaited IPO (Initial Public Offering I believe, though you can correct me if I’m wrong?) is apparently going to happen in May. Mark Zuckerberg and the world’s most famous social media site have both declined any official comment, beyond repeating their years-old mantra that the Facebook/profit thing has always been about waiting until the time was right to go public and cash in on the status of the business.

In essence it is the longest-running start-up story in history – a company that has been running a site for years without floating it on the exchange. Now that time looks nigh, Facebook’s start-up status is finally fading away – to be replace by what ought to be a stupendous flurry of investment in the business.

It’s hard to see how Facebook could have done anything different. Zuckerberg’s website is by far and away the most used in the world. It has over 750 million users and is thought likely to hit one billion before much longer. It represents some of the most effective advertising space in the world. It manages to keep its users engaged and passionate about it even while it sells their personal details to advertisers. And all this before it has made an IPO and asked investors to ratify its value in the “real world” of stocks and shares. Sources in the Silicon Valley have reckoned that the process of getting the IPO ready could be as short as two months – while the initial effects of the move on the markets may take as long as two years to be felt. That’s indicative of the time delay between going public and the start of personal income tax returns filing that represent massive personal wealth hikes on the part of big stakeholders.

Looking at Facebook one can only assume that investors will be flocking to take a piece of the action. Evolution and drive seem to be the twin components of everything the site does. It constantly forges new technologies to make its interactions more and more intuitive. It makes the user experience better with every update. And now it has pioneered the “Like” system, which of course spawned multiple copies of itself as other web big hitters scrambled to keep up.

Facebook’s “Like” option exemplifies the influence social media is now having on the business world. You can’t move for seeing posters that ask people to Like a brand or product on Facebook – and when you look into Google’s algorithms for returning relevant search results it seems clear that social media referrals like the Like are playing a fairly hefty role in determining the order of the Page rankings.

Clearly this is extremely important for business, which is investing more and more in marketing using social media campaigns, influence and presence. The site that has created and continues to create the architecture of the social media sphere is an obvious candidate for major investment as it moves forward – an unassailable market leader is, after all, always a nice asset to have in your portfolio.

The figures trumpeted from the battlements recently have averaged out at 100 billion dollars of public value – nearly four times as much as Google’s 27 billion dollars, which was its value at the end of its first day of public trading two years ago. And industry speculation is also centering around the potential effects that Facebook’s IPO could have on future investment decisions.

With start-ups traditionally floating themselves too early, the example of Facebook and Google becomes a significant trend-changer – a new model for start-up companies. The old dot com boom of the quick buck and the empty website has long gone of course – but with everyone’s favourite site potentially about to unlock its public value to the tune of 100 billion dollars there is clear incentive for more careful conception, expansion and marketing of websites.

That concern is reflected across the board in internet marketing circles. In the bad old days, simply trying to trick Google was enough to get you by. Now it’s all about playing the long game, developing a real presence for a company in the social media stream and reaping rewards in the fullness of time.

About the Author: The above article is composed and edited by Shannen Doherty. She is a technical content writer. She is associated with many technology and designing communities including Broadband Expert as their freelance writer and adviser. In her free time she writes articles related to: internet, mobile broadband, technology mobile broadband, etc.