Sunday, December 04, 2011

2012: Make or break facebook  

I think 2012 will be the litmus test of facebook – sustainability not a success. It is a success. Now the whole “privacy issue” is going to be tricky for Facebook to manage. With the continuous breach of trust, facebook is testing the limits of it 800mn+ users.
The fact is Facebook is now too big to fail. A 100bn+ IPO in 2012 is a fact. Now why the rush or push? I think the IPO will act more as an “insurance cover” rather than an action to raise more money for Facebook.
Why and how insurance cover?
  • A public listed facebook will have more weight and more credibility – when it makes new product releases or updates that affect our privacy. You will now have more transparency – as per the Facebook spokesperson.
  • As  a public listed company with millions of shareholders (I forecast) – if Facebook fails millions of shareholders will fail. So by listing facebook, it will not only raise some cash  but the more important thing is that they will now have – millions of underwriters in their retail shareholders  who will ensure Facebook is not a forgotten story

So the IPO is good for Facebook .