Not everyone is convinced that Facebook going public will benefit the organization in the long run. For some, going public is akin to an indie band “selling out” and joining a major recording label. Like all public companies, Facebook will have to report to its shareholders and always keep the bottom line front and center. Many tech companies can operate for years without making a profit due to private investors. Although Facebook is a profitable organization, its earnings will be scrutinized in a way that it has not experienced before.
Not everyone is convinced that Facebook going public will benefit the organization in the long run. For some, going public is akin to an indie band “selling out” and joining a major recording label. Like all public companies, Facebook will have to report to its shareholders and always keep the bottom line front and center. Many tech companies can operate for years without making a profit due to private investors. Although Facebook is a profitable organization, its earnings will be scrutinized in a way that it has not experienced before.
Will this alter the way that Facebook develops new products and services? I believe it already is. As it stands, Facebook relies heavily on its ad platform for its revenues. The other large component is Zynga, which accounts for 12% of revenue. Facebook ads do not show on mobile platforms, which are becoming a larger part of the web browsing experience. Facebook has already committed to updating its mobile site/app. But hey, if it took the IPO for them to finally improve their mobile capabilities, then I guess it is actually a healthy thing. However, if the only improved feature that Facebook makes is displaying ads, then we would be having a different conversation.
A lot of people (and organizations) are going to become very rich as a result of the Facebook IPO. The company itself will receive a cash infusion, but it remains to be seen if the IPO will be a new beginning or the beginning of the end for Facebook.
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