By ReutersInformationWeek
Mark Zuckerberg, Facebook's founder and chief executive,
has remained mum on the social network's IPO plans, except to
tell CBS's 60 Minutes in January that a 2008 IPO is "highly
unlikely."
That hasn't stopped bloggers and investors from
interpreting Facebook's every move as preparation for an
eventual public offering.
A Facebook spokeswoman declined to comment.
Venture capitalists say the excitement around Facebook is
warranted given the explosive growth in membership. The social
network has more than tripled the number of active members to
70 million from about 20 million in April 2007.
Advertisers are attracted by the huge opportunity presented
by social networks, where millions of people often post their
interests and tastes on their online profiles. This online
behavior allows advertisers to target their messages
specifically to groups of people.
"Social media is going to be mainstream, it's going to be
ubiquitous," said Mayfield Fund managing director Navin Chaddha
at the Reuters Global Technology, Media and Telecoms summit
this week.
"It's where people are going to hang out," he said, adding
that the next Yahoo or Google is going to
emerge from among the crop of these Web 2.0 start-ups.
WEB 2.0
Software giant Microsoft took a $240 million
stake in Facebook last year, valuing the four-year-old company
at $15 billion.
That's slightly more than the $14.7 billion market value of
HJ Heinz, according to Reuters data, but less than
half that of Yahoo, whose market cap was $37.6 billion.
"(Facebook) is not riding a crest," said Bob Davis, general
partner at Highland Capital Partners. "It is the crest in terms
of what's taking place out there today."
Facebook's popularity is so immense that "despite the
lackluster IPO market, if they chose to go public tomorrow,
they could," Davis said at the Reuters Summit.
But the overall market for initial public offerings remains
daunting for most companies this year. Only five U.S.
venture-capital backed companies went public in the first
quarter of 2008, compared to 18 in the same period last year,
according to data from the National Venture Capital
Association, a trade group.
The founder of A Small World, the Facebook for high-fliers,
told the Reuters Summit in Paris that market turbulence was
also preventing it from making a public debut in Europe.
"If the market was super-hot, we'd be considering a
flotation," said founder and Chairman Erik Wachtmeiste.
Some venture capitalists said they've asked start-ups they
fund to shore up cash for the next year or so, until the public
markets open their wallets for their debuts.
"But Facebook is in an enviable position," Highland's Davis
said. "It can afford to sit it out."
(Editing by Brian Moss)
By: Anupreeta Das
Copyright 2008 Reuters. See original article on InformationWeek
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