What will become of Facebook?

As the discussion of all the issues surrounding Facebook came to an end, there was a question that still lingered in my mind: How would the Facebook initial public offering affect Facebook and the multiple services that it provides to its users for free?

Up until recently, Facebook had spent its years growing and working on its social network without any outside involvement. But now, Facebook has decided to appeal to the public market for funds so that it begins to prosper as a company. This decision might not have been anything that they could have controlled as Facebook was already approaching the 500 shareholder mark which would require them to publicly release financial details. This is where the whole initial public offering aspect comes in as Facebook has decided to start selling stocks to anyone willing to invest. According to various recent newspaper reports, Facebook has set an initial public offering of $28-$35 a share which values the company by as much as $96 billion. For Facebook, the initial public offering price would rank it as the largest internet initial public offering and as one of the largest initial public offerings in history according to Renaissance Capital. As this has come to light, there have been many criticisms regarding the price per share as some believe that it is too high. Coming up with the price for an initial public offering is something complex. Here, the company has to consider an amount that price will attract investors while at the same time that will bring the most money for the business itself. This is so as once a company goes public it is highly unlikely that shares will once again serve to bring in more money later on. The initial public offering therefore proves to be the best time to bring in money for the company. But even with all the gossip and criticism surrounding the initial public offering and the initial price per share, there appears to be a lot of investors willing to spend their money for a share of this social network giant.

With their initial public offering, Facebook is set to raise an estimated $13.6 billion. What could Facebook possibly do with this money you might wonder? Well, for starters, Facebook could use this money for many things such as buying off potential competition (like they did with the photo-sharing Instagram), use it to finance potential litigation, or maybe to simply keep improving their services. The bigger concern for users though has been the question of how Facebook might change now that it has established itself as a company. Well, according to CNET, we now can expect Facebook to be more focused on making money more than ever before.

“Public companies have to answer to shareholders, who demand steady, growing profits. So despite the company's warning that it will focus on the consumer experience first, profit will certainly be a high priority. You're already starting to see some of the changes. Facebook confirmed to CNET last week that it was testing paid posts, or charging users to guarantee that a post gets seen by all of its followers (currently, users see only a fraction of posts on their news feed).”

http://news.cnet.com/8301-1023_3-57433719-93/everything-you-need-to-know-about-the-facebook-ipo-faq/

As a of the social networking giant, one can speculate many changes that might arise now that Facebook has appealed to investors for money. With this initial public offering, it is possible that many more issues arise with regards to privacy and data collection and at the same time, it is possible that the current ones are actually solved. Whatever may be the case, only one thing is for certain – only time will tell just what changes Facebook might undergo.