Post date: Jan 30, 2012 11:21:3 PM
NEW YORK CITY, NEW YORK, UNITED STATES (JANUARY 30, 2012) (REUTERS - Get ready for one of the largest IPOs in U.S. history.
Facebook plans to file documents as early as Wednesday (February 1) for an initial public offering - according to the Wall Street Journal. The offering may value the world's largest social network between $75 billion (USD) and $100 billion (USD). Analysts expect the IPO to raise $10 billion (USD).
Media and financial analysts examine why Facebook's IPO will be one of the biggest initial public offering's in U.S. history.
Facebook's initial public offering is likely to be one of the biggest U.S. market debuts ever. Lance Ullanoff, the Editor-in-Chief of social media news blog Mashable, says because of its consistent innovations, Facebook's IPO will stand out from other social media sites public offerings.
"Facebook is the big one. It's the giant and it touches a lot of people across the globe. I think that's very important and we're also seeing this shift. If a social network can become a platform like for example Windows or Google's platform or Android, that's a big deal because you can build things on top of that. Even things like buying stuff, so imagine a world where you're always in Facebook. That's the world Facebook wants to build and doing an IPO is going to give them the money to do it," Ullanoff said.
The potential IPO from Facebook comes at a time when other Internet IPOs have not lived up to pre-debut hype. The performance of LinkedIn, Groupon, and Zynga shows market enthusiasm often wanes after an IPO.
But Ullanoff said that what sets Facebook apart from other online social networks is its consistent innovation, and with an IPO it will have plenty of capital to continue to build on the platforms that have made it an online giant.
"Facebook is consistently growing because it's consistently innovating. It's innovations of late have been Timeline, which changes the way you view your life on-line, and apps and gestures. Apps are basically applications that exist on top of Facebook and gestures are things that you do within those apps that you can share on your timeline. And the way that Facebook has built this is that you share it once and then it is shared consistently. These are innovations that really transform Facebook from this meeting place to something much more. That is a big part of how they maintain the momentum."
Analysts on Wall Street are eagerly waiting for Facebook's financial results. Anupam Palit (Palit) of GreenCrest Capital estimates Facebook's value at about $92 billion (USD).
He points out that Facebook has defined how people think about social media and says that sets it apart from other companies that went public last year in this field.
Palit added that he believes one of the keys to the success of the Facebook IPO is that it has had continuous growth in display ads and many investors are betting Facebook will be able to continue go grow revenues.
"When you think about how most people use Facebook - you update your status, you share your pictures and you like things. You click things that you like. And what is online advertising ? It's the idea that you can target an individual, place an advertisement and advertisers are going to pay a lot of money for it because you know who is viewing that. So when you tell someone like Facebook that you like skiing for example or that you like music or that you like a particular good or that you like shoes, they can take that data, package it up and sell a specific demographic data to advertisers. And advertisers can pay Facebook to target specific audiences. So what they are able to do is sell advertising in a way that nobody has ever done before," Palit explained.
For Wall Street it all comes down to the numbers, and Facebook says it has over 800 million users worldwide.