Facebook is sure to undergo substantial inner-workings changes after it becomes a publicly traded company May 18. A recent study by San Mateo, Calif.-based advisory firm Altimeter Group speculated on a few potential implications posed by the approaching initial public offering. Here are a few that raise interesting propositions worth considering.
As a result of the IPO, the corporate culture of the once-sophomoric startup may change as securities industry regulations aimed at sheltering investors from selective disclosure potentially close off to a certain extent a culture that has been historically transparent and forthcoming. Adding onto to that line of thought, additional challenges to a relatively small group of select talent are added on with newer, shinier superstars who have excelled in areas such as mobile, where Facebook has been weak. Will the new members of the Facebook family be seen as competitors to be pitted against or new creative collaborators to gel with?
Could adjustment to a new corporate culture by veterans who were on the ground from the early days of Facebook exacerbate the brain drain that often occurs after an IPO, as top talent waits for holdings to vest and then takes the money and runs? Following this line of thought, how interesting could it get if top Facebook talent were to flee to tech companies such as search giant Google, which has thus far failed at social?
Facebook’s continued growth will require even more sharing. Increased data gained from user oversharing could position Facebook to become a marketing-data powerhouse if it were to find ways to cleverly package all of the data it amasses (from social graphs to likes to user behaviors). But as new ways of gathering more information, more frequently, are introduced to users, especially if it is done so in the typical opt-out Facebook fashion, users could get disgruntled if the line is crossed and trust is jeopardized. Not only is there a risk that upset users on the now 900 million-strong network will themselves opt-out of Facebook, but more data release could trigger new and greater security concerns. Thus, the social network could end up walking along a tightrope as it aims to gather more data from users in ways they will accept while trying to appease and answer to investors.
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Altimeter speculated on how interesting it could be it Facebook considered using its own platform to manage its investor relations, thereby changing the industry standard of how such things have been done in the past. Facebook has already shaken up the IPO stone structure to a certain extent during its roadshow, and it would not be surprising (but could surely be entertaining) if the social network attempts to continue to change things up as it navigates the process of becoming a publicly traded company.
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