Havas Discovery Blog
8Feb/12

The Facebook IPO – What Does It Really Mean?

Mike Jozaitis - Sr. Digital Marketing Strategist @mjoza | michael.jozaitis@havasdiscovery.com

“Building great things means taking risks” – Mark Zuckerberg

The day the valley, tech pundits, investors and ad agencies have been drooling over for years has finally arrived & passed – Facebook has filed to go public.

Facebook is looking to raise $5 billion on the public markets with their IPO. After the IPO is priced and shopped around to big institutional houses us “regular folks” will get a shake at buying the stock when its initial trading price is set.

This marks the most anticipated tech IPO since Google’s 8 years ago. A bunch of other tech/internet companies (Pandora, Groupon, Zynga, Linkedin, Demand Media) have gone public over the past year signifying the “dot com” bubble is truly a thing of the past; some have done well and others have smashed to bits.  Facebook looks to be a different beast all together.

FB (their soon to be ticker symbol) makes 85% of their revenue from advertising and 15% from payments & transactions (think purchases in games like Farmville & Mafia wars). Now, strong revenue is one thing; profits are another, but there’s also what the greater “meaning” behind Facebook going public.

To me, it’s that those once thought of as “rebels” and “trouble makers” are turning into the new establishment.

Now, that’s a pretty bold statement and I’m firmly aware of it. But everywhere I look around the people that used to be called “rabble rousers” and “hard to control” are now leading some of the most important and innovative companies out there.

Everyone who’s seen “The Social Network” knows what I’m talking about when I call Zuck a “trouble maker;” he “steals” the idea for Facebook from the Winklevoss twins, builds “The Facebook,” gets tons of traction and adoption, double-crossing his best friend, moves the company to California… yada yada, you know the rest of the story.

Let’s take a step back for a second; and apply this “unruly” logic to some other CEOs. Here’s the first few that come to my mind (though there’s hundreds more out there)

  • Larry Page - Google founder who returned as CEO after Eric Schmidt’s “adult supervision” was no longer needed.
  • President Obama - grass roots organizer to leader of the free world (one could argue the US government functions as a company). Need I say more?
  • Henry Blodget - the infamous dot-com era stock analyst that Elliot Spitzer had banned from trading trading forever is now running one of the most popular and influential business blogs out there today, Business Insider.
  • Steve Jobs - rest in peace.

In Zuck we trust? Looks like many are about to make that bet.

Post Script...

If you’re more interested in the heady and technical details of the deal – which exec team member has the most stock, what to expect next, which early stage investors are about to buy their 6th yacht, and so forth; here are a few links to excellent coverage & analysis from some of my some of fav reporters.

http://sec.gov/Archives/edgar/data/1326801/000119312512034517/d287954ds1.htm#toc287954_13

http://allthingsd.com/20120201/on-its-eighth-birthday-facebook-files-to-raise-5-billion-in-massive-ipo/

http://allthingsd.com/20120201/zuckerberg-tells-investors-we-dont-build-services-to-make-money/

http://www.splatf.com/2012/02/facebook-revenue/

http://dealbook.nytimes.com/2012/02/01/facebook-files-for-an-i-p-o/