Facebook Have Staying Power for a 2012 IPO?
Mark Zuckerburg may have a new movie coming out about his dealings with Facebook and a previous “partner” in the enterprise, but on the minds of investors isn’t a scandal. Nope, we’re looking toward an IPO.
2012 IPO
All indications are that Facebook will IPO in 2012 after it adds income and membership, two elements that are vital to a successful IPO. Since the company is right on the brink of profitability, a minute increase in revenue could add substantially to its bottomline and price, so waiting, it seems, is the best strategy.
My question, though, is whether or not Facebook as a company and website has any staying power with the public. Seeing how Myspace dominated the segment for some time, and before that we had Friendster, I see little reason why Facebook will have any edge over the others and remain as the most popular social networking choice.
Creative Destruction
One of the reasons why I am generally a pessimist on technology centric businesses is because of the rate at which the business changes. It was only a few years ago that text outpaced video, that Google didn’t exist, and the internet was populated with geeks rather than the general population.
To continue on indefinitely, Facebook will have to reach the critical mass. With social networks, critical mass is the size that is large enough that no competitor could steal enough of its users to create a shift from Facebook to the next big thing. Facebook, of course, was able to steal the userbase of Myspace with exclusivity (college kids only, at first) and then break into the older, less-likely-to-use-myspace, demographic.
I want to hear from everyone. Will Facebook still be the hot thing 2, 3, 10 years from now?
