As most of you have probably heard, Facebook recently announced that it plans to file as a publicly traded company this week.
Experts estimate that Facebook will be valued at over 100 billion dollars and will attempt to raise more than $10 billion in stock.
Obviously with an influx of cash on a scale that large, there are going to be some major changes to Facebook in the future. Facebook’s internal short-term and long-term goals will have to change as the company attempts to satisfy their investors.
What Does The Facebook IPO Mean for Users?
There is one aspect of the Facebook IPO that is very clear – it will display more advertisements to users.
Although it is not exactly clear “how” Facebook will implement their advertisement system after it becomes a publicly traded company, it is clear that, in order to satisfy shareholders, advertisement impressions will have to increase.
These advertisements will most likely appear within the stream of updates users currently view on their Facebook homepage. Ads may also appear in the real-time activity ticker and possibly on users’ personal profile pages.
There are many reasons that a company files to be traded publicly but one of them is for certain – to gain capital to innovate and improve on the current business model. Facebook stands to gain a lot of cash and if you think they’re just going to put it in the bank and not spend it – you’re wrong.
With the influx of cash Facebook is going to have, the company will purchase more startup companies, continue to develop their new apps system and continue to improve their overall user experience.
There is no doubt that Facebook has revolutionized modern communication as we know it but as other companies such as Google, Microsoft, Twitter and LinkedIn try to compete in the social media industry, Facebook will use investor money in an attempt to remain the most popular social networking platform in the world.
Mark Zuckerburg made it clear during the 2011 F8 Conference that he wants Facebook to be an integral part of its users’ everyday lives. With all the extra money, we will see Facebook continue to evolve to follow us on our mobile devices and become more engrained in our real life social circles.
As mentioned in the introduction, Facebook’s short-term and long-term goals will change in response to investor desires. In the short term, Facebook will be pressured to make more money each subsequent quarter. In order to accomplish this, Facebook’s long term goals will evolve to concentrate more on improving the structure of Facebook’s monetization strategies.
Although growth was most likely an important goal of Facebook before filing as a publicly traded company, its importance will increase as Facebook attempts to build its user base as quickly as possible and mine more data from its users.
Hopefully Facebook will not lose sight of what made it so popular to begin with. As a privately held company, Facebook’s main goal was to appease its user base. Now that investors are also an important part of Facebook, will the company lose site of who is really most important – the end users?
Currently, Facebook is completely free to anyone who has a valid email address. As we can see with other online services, segmenting your market into paid users and non-paid users can be a very effective business model. LinkedIn, Pandora, Spotify and other web-based services have proven this model to be effective.
Facebook has already implemented the “Facebook Credits” feature which allows users to spend real money to buy digital items within Facebook games. Even if “Facebook Premium” is not implemented, Facebook users will definitely see more options and enticements for purchasing Facebook Credits throughout their normal use of Facebook.
With the number of highly addicted users Facebook already has, one can imagine that a large portion of those users would be willing to pay a monthly fee for a version of Facebook that offers additional features in comparison to the basic Facebook account.
As Facebook attempts to increase involvement in our everyday lives, the social network’s integration with outside companies will also continue to increase. With the increased amount of money Facebook will receive from investors, they will build partnerships with 3rd party services so that seemingly all of the services you use on a daily basis will be linked to Facebook.
Already, the list is endless in regards to the number of services on the internet that allow you to log in using your Facebook account. Being able to pay for products and services is something that is already being implemented and we will see a rapid expansion of that feature once Facebook has more funds to dump in to it.
Facebook is going to plaster their brand name in as many places as possible and with the amount of money gained from going public, the social media giant should have no problem in doing so.