Hello everyone!

Word is out that Facebook might be doing it's IPO soon. What are your thoughts on the company's prospects?

Thanks!

Seriously can't wait for this. Valuations and multiples will be key of course, but as a company, the product is phenomenal. People are questioning how long Facebook will be dominant, but if really want to know just how sizeable Facebook's competitive advantage is, ask the engineers over at Google. They launched a social network with the weight of the the behemoth that is Google behind it, with huge fanfare and integration with the high traffic suite of Google products, including Gmail and the Google search engine, and they are still struggling to build a userbase of people who actually care about their Google+ profile and aren't just there to take a curious peek. Facebook's competitive advantage IS the fact that everyone is there, and that's extremely hard to bring down. Short of another technological game changer in the next several years (ie. people stop using computers and mobile apps because there's a whole another category opening up), Facebook is here to stay, with huge untapped revenue streams waiting for it.

Shane King,

How Facebook will monetize its dominant position is the real question. Until now, Facebook ads haven't brought in a lot of revenues, especially when compared to the number of users they have. Also, the 30% cut they are planning to take from Facebook Credit purchases on the site is already being called the "Facebook Tax" and many big players like Zynga are trying to build Facebook-independent platforms.

Although I agree with your point about Facebooks dominant position, I'm skeptical about the price tag valuation this IPO might have.

Hey Karen,

I do agree, it's hard to predict what exact moves will Facebook will take in terms of finding revenue streams. However, one of the reasons predicting such moves is so hard right now is that there are SO MANY different possibilities. Facebook can integrate ads in different ways. Facebook can partner with corporates to give them more highlighted Facebook fan pages. They can let artists sell music on their fan pages. They can let movies sell pre-release movie tickets. They could sell premium packages of more detailed statistics on Facebook activity. The number of options they have open to them is partially why I think they have been relatively slow in opening up some of these revenue streams, because focusing on any particular one could distract them from other revenue streams. Also, even at it stands today, Facebook is generating serious ad revenue - $4.27 billion in 2011 according to Bloomberg (www.bloomberg.com/news/2011-09-20/facebo...arketer-says-1-.html). The growth here has been extremely impressive, and with the big increases in Facebook usage on smartphones and emerging markets still coming, I think Facebook can keep these growth rates for quite a while yet.

Shane,

you make some very good points. Thanks for the reply.

Are there any estimates out there on how much a share of Facebook will go for on IPO day?

If the price is right, it might be a buy.

Thanks!

WSJ thinks it's going to be an IPO above $100bn - online.wsj.com/article/SB100014240529702...066773790883672.html

We'll have to wait for prospectus to know for sure, but I don't think it'll be long till we have the Facebook roadshow and IPO announcement.