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Top 10 Predictions for the Looming Facebook IPO

Speculation builds as tech world gears up for public debut

Facebook CEO Mark Zuckerberg bangs a celebratory gong at company headquarters

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The Facebook IPO. Few would argue against the social media giant’s initial public offering being one of the most anticipated and watched debuts of recent history. I’d wager a tidy sum that you’re one of the 845 million reported daily users of Facebook, unless you shun technology or are a card-carrying member of protest groups that claim Facebook is destroying civilization (according to Hitwise, Facebook accounts for a ridiculous 20 percent of all Web pageviews). 

Even if so, if you read the news, it’s nearly impossible to escape the hype surrounding Facebook’s stock market opening. Valuation estimates are high, and speculation is swirling in the final days before we see if the market is ready to hit the “like” button. Here’s a look at some of the potential outcomes of Facebook going public:

1) Facebook will exceed its expected valuation in the first few days of trading. Zuckerberg et al filed IPO docs in February indicating it was seeking to raise $5 billion. With shares reportedly priced between $28 and $35, Facebook’s valuation is now expected to be between $60 billion and $75 billion. But some analysts are predicting the company’s valuation to rise as high as $140 billion

2) The company’s valuation and share prices will tumble after the first week. We saw it in Groupon’s stumble, as well as with Zynga, Pandora and Demand Media. Tech stocks may rise fast but just as quickly can drop off a cliff. In a way, they are as tumultuous as the whole of the technology sphere.

3) Facebook will begin—finally—to maximize mobile ads.  A recent amendment to the company’s S-1 showed that it has experienced a drop in overall ad revenue. Meanwhile, the value of each Google user is $30, compared to Facebook’s paltry $4.39 per person. Why? The ability to use geolocation in the targeting of ads (not to mention that Google's been at this monetization game for a lot longer). Facebook claims an amazing 425 million mobile users, yet the company's only mobile ads are in fact the same as its Sponsored Stories. This is going to have to change. Facebook is hiking ad rates ahead of the IPO, but the social giant—in spite of its mission to keep Facebook from becoming like ad-clogged MySpace—is losing out on a large swath of business by not maximizing mobile.

4) Zuckerberg will continue his acquisition spree. Since its inception in 2005, Facebook has swallowed up competitors and companies with technology that could be assimilated into its model. For example, in 2009 it purchased the social network aggregator FriendFeed; in 2010, it purchased rival network Friendster’s patents. Last year, Facebook made a total of nine acquisitions, including the purchase of location-based service Gowalla and mobile app developer Snaptu. This year, young as it is, has already seen Facebook acquire Instagram for $1 billion, and most recently, social discovery platform Glancee. Depending on Facebook’s stock market success, more such acquisitions could be imminent.

5) Zuckerberg will continue to wear hoodies to all major press events and executive board meetings. If nothing else on this list comes to be, this is at least certain. Whether he’s amending his “I’m CEO, Bitch” business cards is unknown.

6) A bunch more people will delete their Facebook profiles. Deleting Facebook profiles has become the new rebellion. Just like when quitting smoking cigarettes, it’s often helpful to have a catalyst or a set date on which to say goodbye—perhaps an IPO date?

7) Zuckerberg will retain majority control of Facebook, but the company’s corporate culture will change. For example, Facebook has come out in support of the Cyber Intelligence Sharing and Protection Act, which has many Internet entrepreneurs (like Reddit co-founder Alexis Ohanian) boycotting the IPO. A public company has much more to lose by taking such polarizing positions. Much has also been written about how much fun it is to work for Facebook—with Zuckerberg banging gongs to celebrate good ideas, etc.—but as a public entity with shareholders, more attention is going to be paid to profits and professionalism. Zuckerberg has previously been criticized by his own employees for not being a more professional CEO.

8) Facebook will either completely revamp or kill its f-commerce platform. It hasn’t taken off. Many companies would vastly prefer commerce traffic take place on their own websites. A few companies are buying in, but many more big names are not.

9) Facebook and Google will end up in some kind of death match. Facebook doesn’t offer search yet, but it doesn’t mean it won’t look into it—especially when the company finds itself flush with IPO cash. Same goes for streaming video. Google is a mighty contender, thanks especially to its efforts to integrate its various services, but Facebook has the means and audience to give it a run for its money. A symbiosis? Not likely.

10) Facebook will finally create its own ad network. It will likely continue to try to preserve its (relatively) clean website feel by using its ad network to serve targeted ads to Facebook users on other sites. But Google and Facebook compete for ad dollars, and with its own network in place as a competitor to AdSense, it could give Google a run for that money. It’s already been working hard to beef up its analytics


Do you have some predictions of your own? Feel free to leave them in the comments. And remember to share this Facebook story on Facebook, just because it's meta.