This morning, the Wall Street Journal points out a new issue facing Facebook thanks to their new investment by Microsoft: hiring. Any rise in Facebook’s valuation will create a subsequent rise in employee stock options. While that wasn’t a significant problem for Google or Microsoft who’s employees became overnight millionaires after their respective IPOs, Facebook has a huge valuation considering their estimated $150 million yearly revenue.
Any new employees that join Facebook are going to have to truly believe in a future valuation that is comparable with Microsoft and Google. If Facebook plays their cards right that may not be out of the question but given their current size and revenue base, they have a long way to go. For all those early Facebook employees that had the privilege of a small share price, they may not be as happy as you would imagine even with Facebook’s new valuation.
While Facebook is now worth billions of dollars, rumor has it that many employees wanted Mark Zuckerberg to accept an acquisition offer from Yahoo or Microsoft. At this point though, Facebook’s only exit strategy is IPO and that could easily be years away. While some employees may not be happy, Facebook still provides new employees with perhaps the greatest opportunity for becoming overnight millionaires like their Microsoft and Google predecessors (some of whom now work for Facebook). Even though some may have wanted Zuckerberg to exit, times aren’t too tough over at Facebook currently.