Is Facebook Here to Stay?

Facebook will be selling shares tomorrow. According to Shraysi Tandon and David Fickling, Bloomberg.com, “Facebook’s IPO (Initial Public Offering), scheduled for May 17, plans to raise as much as $11.8 billion and values the operator of the world’s most popular social networking site at as much as $96 billion. Investors in the sale are betting the company’s database of 526 million daily active users makes it worth about 99 times the net income earned in the 12 months through March 31. And Apple Inc. (AAPL) co-founder Steve Wozniak said investors looking to make money should buy Facebook Inc. (FB) shares when the social networking site sells stock in what may be a record initial public offering for an Internet business.” Facebook’s IPO will be offering 337.4 million shares at $28 to $35. After the IPO, Facebook shares will trade on the NASDAQ Stock Market under the symbol FB.

Facebook announced last January that it would be filing public financial reports this year because it expected to breach a regulatory threshold on the number of its shareholders. Up until March 22, 2012, in the U.S., companies with more than 500 stockholders had to publish their financial data under investor- protection laws. Now the limit has been raised to 2,000 shareholders, still well below the 337.4 million shares being offered.

The risk involved in offering public shares is great. While being able to gather huge funding, the risk is that the company will be ripe for take-over. Of course Mark Zuckerberg will have received serious money in the meantime, so he may not be worried about losing control of the company. Zuckerberg started Facebook while a student at Harvard University back in 2004. Between the ads on Facebook, the money about Zuckerberg and his partners, and now the sale of shares, Zuckerberg will have more money than any reasonable person could spend in their lifetime. (So let’s do the math… 337.4 million shares times $32 average price per share is $11,000,000,000. Is there even a name for that many zeros?)

Back to the question at hand, is Facebook here to stay? Facebook and social media are here to stay. MySpace was great in its time, but not as easy to navigate or set up as Facebook. However, bands are still using MySpace as their web presence. There are other social media sites as well, like Twitter, LinkedIn, Xing, MeetUp, etc., but none have the user base that Facebook has. As of April 2012, there are 900 million Facebook users. It seems to me that social media and Facebook are a part of a lot of lives. If not Facebook, then perhaps their descendant will be with us. Social media isn’t going away any time soon.

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