Facebook’s long-awaited initial public offer (IPO) may come as early as this week, if media reports are to be believed.
Reports that the world’s largest social network was readying itself to go public first surfaced in the Wall Street Journal.
The offering is widely anticipated to raise around $10-billion for Facebook, giving it a valuation of between $75-billion and $100-billion — a record for a company in the internet sector. By comparison, Google’s 2004 IPO raised $1.9-billion, giving it a valuation of $23-billion.
In fact, the offering would be the fourth highest for a US company, behind Visa Inc., General Motors Co., and AT&T Wireless.
Citing “people familiar with the matter”, the Journal says that the social network is “close to picking Morgan Stanley to lead the deal”.
Were it to achieve a $100-billion valuation, the Journal says, “Facebook would be worth about the same as McDonald’s Corp. and nearly half of Google”.
The recent flurry of activity around Facebook’s new Timeline feature may also be an indication that it is readying itself to go public.
The company recently launched apps from some 60 new partners for Timeline, allowing people to share everything from what they’d been cooking to where they’d booked their next holiday.
It also recently announced that Timeline would be rolled out to every single Facebook user within the next few weeks.
Facebook founder Mark Zuckerberg had previously stated that he was in “no rush” to take Facebook public.
Going public means that we will get our first accurate glimpse into Facebook’s financial performance. Had the company remained private, a regulatory requirement forcing it to reveal its financials as it went past 500 shareholders would have kicked in.
According to the Journal, Zuckerberg “decided it made more sense for Facebook to go public and reap some financial benefit from an IPO, rather than stay private but have to release its financial information.”
The majority of Facebook’s revenue comes from advertising to its 800-million plus users, although apps are playing an increasingly important role in the way people experience the social network. Given its investment in them, they will probably also play an increasingly significant role when it comes to netting the social network revenue.
According to news site, Firstpost, Investment bankers are excited by the idea of Facebook going public and believe that it could revive the IPO market in 2012.