Facebook’s IPO – The Modern “Printing Press” To Go Public



With a single document filing, Facebook put years of speculation to rest when it announced its intention to do a $5 billion IPO – possibly the biggest tech IPO in history.  To put that in perspective, Huffington Post writer Timothy Stenovec’s piece,  compared Facebook’s planned IPO to other notable tech IPOs – such as Google ($1.67 billion in August 2004) Amazon ($54 million in May 1997), and most recently, Groupon ($700 million IPO in November 2011).  Going back even further, in December 1980, Apple did a $100 million IPO. For many industry watchers, Facebook’s IPO and its possible valuation of $100 billion is not just an important step in the company’s evolution from a dorm-room project to a possible future bluechip stock – it’s a bellwether that signals another tech bubble or a truly sustainable investment period for technology companies.  In a letter accompanying the company’s S- 1 filing, Founder and CEO Mark Zuckerberg explained that the Facebook IPO, and moreover, Facebook’s status as a company, is simply a means to an end.

So, what exactly is Facebook’s end?  According to Zuckerberg, it’s not just a social networking company; it’s a “social mission” that aims to move the human condition forward by connecting people.  Zuckerberg even compares Facebook’s impact on society to that of the printing press – a point that has not been lost on journalists.   In a recent New York Times article, Somini Sengupta and Claire Cain Miller compared Facebook’s professed goals with those of Google -  shedding light on the trend of prominent tech leaders to loudly engrain social responsibility into the DNA of their organization, rather than just making it an afterthought.

It’s important to note that as it stands, Facebook won’t conform to conventional notions of what it means to be a “public company.”  Marc Zuckerberg controls the lion’s share of the company’s voting rights - 57% - and will continue to do so after the company is public.  Under these terms, stock-holders would have a diminished role as stake-holders – they would be financially invested in the company while lacking a significant voice in how the company is run. Industry vets such as Menlo Ventures’ Mark Siegel has even been quoted saying  that the deal Zuckerberg struck is “not common at all.”  The implications of this deal require additional examination – especially from a PR perspective – and Breakaway will be doing just that in a follow-up post.

On a lighter note, Facebook is also affecting the lives of those involved in its beginnings. A graffiti artist who Sean Parker, former Facebook president, commissioned to do murals at the company’s headquarters in 2005 was paid in Facebook stock. When the company goes public, his payout may be close to $200 million.

It is crazy when you think how far Facebook has come. Who would have thought that a project inspired and named after the very traditional college “Face Books” of yesteryear would be the most-ballyhooed tech IPO and maybe even the modern spiritual successor to the printing press?



Tags: Hot Tech, Breakaway Team



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