Facebook is today expected to announce plans to go public, in a flotation expected to value the company at an almost unimaginable $100 billion.
According to analysts, Morgan Stanley is likely to lead the IPO, which should take place in early summer. The deal could raise $5 to $10 billion, making it the biggest internet company offering ever. Some will question whether the company really is that valuable.
Ironically – or maybe not – for a company that makes its money from the vast quantities of data it holds on its customers, Facebook’s traditionally been extremely secretive.
But when it files the IPO documents with the Securities and Exchange Commission, it will need to reveal how much money it intends to raise and what it intends to do with it, as well as details of its financial performance and future plans.
The move will thus subject the company to increased scrutiny from investors – and from government regulators.
“One of the first things Google did after its IPO was to hire an army of lobbyists, and I expect Facebook to follow suit — especially if it follows the advice above and looks for creative and expansive new ways to use its data,” says Forrester analyst Nate Elliott on the company blog.
“Expect lots of blue business cards floating around Brussels and Washington by the end of 2012. After all, $10 billion buys a lot of influence.”
Much of that money, though, will need to go towards improving the company’s marketing platform and finding new revenue streams.
“Facebook needs to use its data not just to power ad targeting on its own site, but everywhere online,” says Elliott.
“Building or buying an ad exchange or a sell-side platform is one obvious way to do this; and it needs to work hard on other creative and profitable (and legal) uses of its data as well.”
In other words, expect to see even more targeted advertising, and more privacy concerns.