Facebook likely to put off IPO to 2012
30 Jul 2010
Social network heavyweight Facebook is likely to put off its initial public offering until 2012, despite having prepared itself late last year for a public offering by creating a dual-class stock structure.
Facebook would benefit from another year of growth, minus the added scrutiny that comes with a public listing, by delaying its float by a year.
In November 2009, Facebook had taken the first step for an IPO in the future by setting up a dual-class stock structure to ensure that founder Mark Zuckerberg and other existing investors had voting control over the company . (See: Facebook prepares for IPO, sets up dual class stock structure)
The Palo Alto-based company created a dual-class stock structure and converted all of its current shares into Class B shares, which will have 10 votes each. It said the reason for doing it was, "Because existing shareholders wanted to maintain control over voting on certain issues" and "focus on the long-term."
Although the company had said that at that time that it had no plans to go public, analysts had said that such dual-class stock structures are not unusual and indicate that the company is planning to go public.
By delaying the IPO, Facebook, which is currently valued at about $24.9 billion, would use the time to propel its user base beyond the half a billion members in its community reached this month. (See: Facebook community reaches half-billion)
Meanwhile, the site has grown increasingly profitable though not on the scale of Google and its 2010 revenue is expected to be around $1.1 billion.
The site obviously has huge amount of information what people like and dislike, which advertisers and marketers would find useful but every attempt at that has triggered fresh privacy concerns.
