Now what?
As Facebook turns to Wall Street in the biggest public offering ever by an Internet company, it faces a nike air jordans new, unenviable test: how to keep growing and enriching its hungry new shareholders.
The answer lies in what Facebook will be able to do — and how quickly — with its crown jewel: its status as nike air jordans 11 an online directory for a good chunk of the human race, with the names, photos, tastes and desires of nearly a billion people.
Facebook’s shares are expected to begin trading as early as this week. Already, lots of investors are scrambling to buy those shares, with giddy hopes that it will become a big moneymaker like Googlenike air jordans 13 . Because of that high demand, Facebook is expected to increase its offering price from its initial range, giving the company a valuation possibly as high as $104 billion.
In the eight years since it sprang out of a Harvard dorm room, Facebook has signed up users at breakneck speed,nike air jordans 23 kept them glued to the site for longer stretches of time and turned a profit by using their personal information to customize the ads they see.
Whether it can spin that nike air jordans cheap data into enough gold to justify a valuation of as much as $104 billion remains unclear.
“We know Facebook has an awful lot of data, but what they have not worked out yet is the most effective means of using that data for advertising,” said Catherine Tucker, a professor of marketingniek air jordans for kids at the Sloan School of Management at the Massachusetts Institute of Technology. “They are going to have to experiment a lot more.”
Analysts, investors and company executives can rattle off any number of challenges facing the company. As it works to better match ads to people, it has to avoid violating its users’ perceivedniek air jordans for sale sense of privacy or inviting regulatory scrutiny. It needs to find other ways to generate revenue, like allowing people to buy more goods and services with Facebook Credits, a kind of virtual currency. Most niek air jordans retro urgently it has to make money on mobile devices, the window to Facebook for more and more people.
All the while, its ability to innovate with new features and approaches — to “break things,” in the words niek air jordans shoes of Mr. Zuckerberg — may be markedly constrained once it has investors to answer to.
“They are going to have to think about whether they can continue with the motto ‘Done is better than perfect,’ ” said Susan Etlinger, an industry analyst at the Altimeter Group. “When you’re niek air jordans wholesale operating as a public company, life is very different. We haven’t seen that play out yet. It’s going to take a few quarters to figure out what a public Facebook is going to look like.”
Skeptics point out that the company’s revenue growth showed signs of slowing in the first quarter of 2012. And a Bloomberg survey of 1,253 investors, analysts and traders found that a substantial majority were dubious about the eye-popping valuation Facebook was seeking. “It’s a risky asset. No doubt about that,” said Brian Wieser, of Pivotal Research Group. “Google was less risky.” No matter. Mr. Wieser says he thinks that Facebook is worth $83 billion and that its revenue will grow by at least 30 percent for the next five years.
The comparisons to Google are inevitable. When that company went public in 2004, there were so many doubters that the company lowered its offering price to $85 a share. It closed at just over $100 on the first day of trading, and now sells for more than $600. Facebook is farther along than Google was in terms of revenue, having brought in nearly $4 billion last year, or $5.11 a user, compared with Google’s $2 billion in 2003.
One Facebook investor, who spoke on the condition of anonymity because of market regulations as the offering draws near, noted that when Google went public it already had a clear business strategy. By contrast, he described Facebook this way: “They have built an incredibly valuable asset — as opposed to a business they have executed well.”