The social network founded by Mark Zuckerberg in 2004, has chosen Morgan Stanley as the lead underwriter with four others playing a role. Others include Goldman Sacks, Bank of America Merrill Lynch, Barclays, and JP Morgan.
Facebook is looking to be valued at $75 billion to $100 billion. This IPO is expected by many here in Silicon Valley to reboot the economy in tech. If Facebook could lift the concerns by the general public that tech is not in a bubble, entrepreneurs and investors feel that a real tech boom is here to stay.
Facebook will be expected to push the envelope on revenue to justify their massive valuation. While many tech insiders and investor rake in the dough, Facebook will still have to perform at such a high level to maintain their position as the bellweather for the new social and mobile Internet.
As SiliconANGLE reported earlier Facebook represents a new model that is disrupting the current connected user and advertising landscape. The likes that the world hasn’t seen since Google started printing money with their cost per click (CPC) search ad model. Many experts including me think Facebook will be rolling out new value based ad products that create new standards in social media or online advertising.
Facebook Will Be Under Siege With Lawsuits
Facebook as they go public will also face some new challenges – massive lawsuits. According to Reuters, Facebook is coming under the same fierce attacks being waged against other big technology companies: patent lawsuits.
Last year, Facebook was named as a defendant in 22 lawsuits accusing it of patent infringement, double the number from 2010, according to a Reuters analysis of court documents on legal database Westlaw, a Thomson Reuters unit.
Among the lawsuits is one alleging Facebook violated a patent that covers the core ability to transmit messages to large networks of users. Facebook said in a court filing earlier this month that it will seek to dismiss that lawsuit.
Previously, the bulk of legal challenges brought by patent holders against tech companies has focused on markets like smartphones, with defendants including Apple and Microsoft.
The attacks against Facebook signal that social media has become a new front in the Silicon Valley patent wars. The company’s adversaries include a former lawyer at Kirkland & Ellis, one of the biggest U.S. law firms, whose new firm filed the lawsuit over how Facebook transmits messages.
My Prediction in 2007 Was Correct – Facebook is a Monetization Machine
Not to say I told all the skeptics but I was right in 2007 when everyone was down on Facebook.
In 2007 I wrote that Facebook would be a monetization machine … Here is the post I wrote in 2007 –
This post today says that advertising isn’t working on Facebook. Well the post missed the point. So did John Battelle. Ad products and standards haven’t yet evolved for the real value of Facebook – the communities. You can run a poll, give a gift, look at a banner…bla bla bla… The users of Facebook are savvy. So are the top advertisers. Look for a major ad buy on Facebook by a big player – no doubt it will happen soon.
Facebook will soon be a monetiztion machine. When the ad units evolve to match the social nature of the communities and communications then the money will flow big. John Battelle says that Google pagerank was the reason for their potential rise but he can’t see it now. Hey CNBC Facebook has the community model nailed. Yahoo groups is dying and a new generation of users will move to the facebook approach (imeem just announced music deal with Warner). More will come. Btw: pagerank wasn’t what made Google it was Adwords and Adsense that drove off of Googles search. Here with Facebook you have the user communities growing rapidly (like pagerank for search) and a yet to be developed ad model. That will come in the form of virtual goods which they are already doing and a new adsense like community ad model.
What is the ad model? If your looking in page view land (like all the VCs hunting page view elephants) then you won’t see it. Look elsewhere.
Pagerank is to Google as Community is to Facebook
Adwords/Adsense is to Google as ????? is to Facebook.
Facebook will be a monster in monetization in the next 18 months.
Lets see if Facebook could be a historic durable company in the long run.