Facebook Stock Going Public?

zmaragdus writes "Facebook Inc. converted its existing stock holdings into different classes of stocks (Class A and Class B) designed to give certain shareholders more power than others. This has been typically done in an IPO of a company's stock to give important people (company founders, for instance) more clout in the actions of the company when stock is first offered to the public. While Facebook maintains that it does not plan to offer stock publicly in the near future, this restructuring is one of the critical steps in doing so."

Comments

hmm

[TornCityVenz]

I like this.

Re:hmm

[Anonymous Coward]

I like this.

I enjoy this for another reason.

This reminds me of the old bubble, where companies who exist merely on advertising go public. Lots of people get hyped about it; eventually everyone realizes that it's a waste of money and the company goes under.

Hopefully history repeats itself, and like all of the dot-com bubble companies, facebook will be no more.

Re:hmm

[Psaakyrn]

Google also exists merely on advertising, so it isn't always true.

Re:hmm

[Anonymous Coward]

After scoffing when Google IPO'd at $80... and then having to watch as the stock soared to over $500... I might have to get in on this one.

Re:hmm

[Culture20]

I don't. Once it's a public company, it has a fiduciary responsibility to bend its users over to try and get as much money for its shareholders as it can.

Re:hmm

[FooAtWFU]

Screwing users over is great for short-term revenue, but companies who are in it for the long haul value things like brand loyalty. Of course, if you're just in it for the short haul and you can convince someone else to take your stock and give you money now, you might not care.

(Personally, I'm not going to buy any Facebook. One of my mutual funds will probably pick up a few shares indirectly; whatever...)

Re:hmm

[Anonymous Coward]

however google makes a profit, facebook doesn't

Re:hmm

[Darkness404]

You have to realize there are a -lot- of companies that exist mostly on advertising (Google anyone?) and are doing great. The reason why Facebook shouldn't offer public stock is mostly because it can't -do- much. Yeah, it has applications (and this alone will help Facebook make at least enough to break even or make a small profit) but who is going to pay for a crappy web application? A few people might buy some "limited edition" items in Farmville, but who is going to pay for access to Farmville (and that is about the only way that Facebook itself could get a cut of the funds) itself? Facebook has a lot of data, but selling that data would run afoul of some privacy laws and give Facebook lots of bad press. Facebook users have also all united against paying for it, the fact that it is web based means that if they charged for Facebook Mobile a third-party application could arise. Facebook can improve a lot, it is notoriously unreliable, chat only works half the time, and other features randomly break. But as for branching out in multiple areas like Google has done, I don't think Facebook can do that.

Re:hmm

[caffeinemessiah]

Once it's a public company, it has a fiduciary responsibility to bend its users over to try and get as much money for its shareholders as it can.

Here's an interesting thing they could think of. Ask users to pay a small monthly fee to see who views their profiles. Sure, it'll drive a lot of people off the site, but Facebook is so ingrained in the lives of a certain demographic that it would feed of insecurities and fears and certainly generate a decent monthly revenue. The same insecurities and fears would ensure that a user pool never disappears, since getting off Facebook would deprive you of OMG! why is Sheila dressed like a tramp!??

Re:hmm

[Anonymous Coward]

Facebook cleared a profit recently (September) and have a huge user base, I don't see it disappearing anytime soon.

Re:hmm

[TangoMargarine]

If facebook "exists merely on advertising" but doesn't turn a profit, doesn't that mean that it must exist on something else, too? Such as direct infusions of cash?

Re:hmm

[Anonymous Coward]

Brand loyalty? What, you been frozen in a glacier for the last fifty years? Companies care only about making the next quarter's numbers, because that's what their shareholders scream for. The "long haul", as you so quaintly put it, is an artifact of a now dead business concept. I want my money now, and fuck the future. That's today's business model.

Re:hmm

[mysidia]

Facebook is definitely no Google. They have been successful primarily due to their rate of adoption.

They provided unique useful features to attract people (social networking).

But now social networking sites ala FB are a dime a dozen.

It remains to be seen how robust FB will be against competition in the long term.

What value does FB provide to its members that another social networking site is unable to?

Re:hmm

[eln]

Facebook also has deep flaws, both in technology and management, that present big opportunities for a potential competitor. Facebook makes money now because its userbase has reached a critical mass, and its thought that since everyone uses it, no one will want to move off it. People thought the same thing about MySpace just a few years ago, and now it's widely regarded as the ghetto of the Internet, and people are leaving it in droves. To go back further, Yahoo was the darling of the tech economy before Google showed up.

Make no mistake about it, Facebook is very vulnerable. All it needs is someone with the brains and business model to exploit those vulnerabilities, and it's finished. Facebook may be a smart short-term play, but holding their stock for the long term would be a disaster.

Re:hmm

[Anonymous Coward]

There's companies in it for the long haul?

Re:hmm

[FooAtWFU]

Sure. For instance: Burlington Northern / Santa Fe. (And fancy that! They're being bought out by someone who's able to appreciate companies who are in it for the long haul.)

Re:hmm

[Anonymous Coward]

You always hear that a company has a 'fiduciary responsibility' or some similar responsibility, yet no one ever seems to be able to point to the statute that dictates this. Any pointers?

Re:hmm

[yuhong]

Well, I know, I discussed this before, and I now have some more links on the flaws of "shareholder value":
http://episteme.arstechnica.com/eve/forums/a/tpc/f/599009962631/m/750009712041
http://www.aom.pace.edu/amle/AMLEVolume4Issue1pp75-91.pdf
http://www.rose-hulman.edu/~christ/vfecon_asee2008.pdf

Re:hmm

[yuhong]

Why do you think Facebook is going dual class?

Re:hmm

[nacturation]

Facebook could easily develop a microtransaction API. $10.00 = 1000 credits. Buying something in an app might cost 5 credits (aka 5 cents), which is impossible to bill for via credit card due to all the fees. So Facebook can start keeping a credit bank, and apps could debit your account based on purchases you authorize. Facebook takes a 20% cut.

Re:hmm

[adavies42]

http://www.rose-hulman.edu/~christ/vfecon_asee2008.pdf

christ goes to rose-hulman? they didn't mention that back in '97 when i was there for a prospective student visit....

Re:hmm

[Phat_Tony]

Practically every discussion of a public company on Slashdot includes a highly rated comment claiming that public companies are obligated to abuse their customers. This is only the case if abusing customers is demonstrably conducive to long term profitability. If abusing one's own customers is bad for long-term profitability, then going public more nearly creates a fiduciary responsibility not to abuse customers.

Companies have a lot of leeway in deciding what will maximize profitability. Some companies keep their customer's data private, provide excellent customer service, and work hard to ensure quality. Others do the opposite. Neither is compulsory to being a public company, and if one wanted to argue it one way or the other, it's always seemed to me that, on average, the companies that treat their customers well do the best in the long term.

Some executives (SCO) manage to do shady things that achieve a short-term stock boost where they can cash-out, at the expense of long-term performance. That's an example of acting against their fiduciary responsibility to their stockholders, which is to ensure long-term stock growth, not a bumpy ride to failure.

Re:hmm

[ThorGod]

Oh, for the love of god, I hope you're right!

Unfortunately, I think companies interested in finding EVERYTHING out about their potential employees would fund it just to keep it around.

Re:hmm

[AmigaMMC]

Screwing users over is great for short-term revenue, but companies who are in it for the long haul value things like brand loyalty.

In this universe things work differently. Take eBay: it had huge brand loyalty and it has been pushing and pushing and people have been abandoning by the thousands. eBay last March actually created (because of a bug according to them, yeah right) a hundred thousand fake listings right in the middle of a user boycott to show the numbers were actually up instead of down. Their stock has been plummeting. Companies with public stock have stopped caring about their users/consumers long time ago. Maybe in your universe things are different, I wish I lived there ;)

Re:hmm

[AmigaMMC]

Here's an interesting thing they could think of. Ask users to pay a small monthly fee to see who views their profiles

You've been subscribing to too many porn sites. Facebook is a social networking site (keep in touch with existing friends/family or meet new ones to play) it's hardly a dating site. I wanna dare and say that the majority of people has privacy setting on, you cannot see past the name and small photo, therefore no one can see their profile in full. But Facebook has an infrastructure that allows for apps and many users use them (if not all of them) so they could charge for some of them (like the stupid birthday reminder, I hope so, so many people will stop using it and stop asking me for my birthday).

Re:hmm

[seandiggity]

Facebook stays afloat by data mining and selling data. Not advertising, that's just icing on the cake.

Re:hmm

[ZPWeeks]

They already have that, but it's not for third-party apps. They started out just charging $1 for "gifts", then later changed it from dollar amounts to credits. Now on someone's birthday, the normal wall post screen displays other options to give "real gifts" and services.

Re:hmm

[Anonymous Coward]

Name any IT company that has been at the top of its field for longer that 10-15 years....

Then sit down and ask why the stockmarket uses 8-10 multiples of earnings to value IT companies.... I can't answer this one.

Then sit down and ask why would you buy into the IPO as a long term investor. Give it 5 years and people won't remember it.

Re:hmm

[Anonymous Coward]

Fuck Google.

Re:hmm

[darthflo]

...ask them for a fee to see whom of their friends viewed their profile.

Facebook isn't a true dating site, it's more of an extension of your real life social circle. Remember that cute chick your friend Greg was with at that concert where you randomly met? You two exchanged a few words, and you're pretty sure she smiled at you in an "interested" sort of way, but you were too shy/drunk/whatever to ask her for/write down her number. Luckily Greg has her as a friend, so you add her too. After she's accepted your friend request (she will, there's at least one mutual friend & she might've already met you); you of course want to know if she just Accepted and was done with that or actually checked out your profile. And that party photos where you're totally drunk, half passed out and look wicked cool. Well, guess what: You can. For 20 credits (1000 credits are $9.99) you get 24 hours of access to your profile's visitor log. Another 20 credits will even tell you whom looked at which one of your photos and videos.
You spent 40 cents for quite a bit more information than you'd get before buying a girl a drink in a bar. In five out of six cases, she might never even visit your profile, but you'll be checking for that occasional one out of six who will. At 20 cts per day and a moderate guess of 100 checks per year, they make $20 off of you directly, $50 off of you for advertising and $30 for some data mining (they have your credit card, know what ads you click, what profiles you look at and they've got pics of everything you do). That's $100, annually for, say, 5% of their 300m user base. $1.5bn ain't that bad.

Re:hmm

[Anonymous Coward]

This is exactly the problem the US is facing. We have had a number of decades where companies have fallen into the trap of getting the next quarter's numbers up over everything else. This is why PARC, Bell Labs, and other R&D places which have paid off in the long run, as opposed to within 3-6 months have been pulled.

Obligatory auto example: When a driver is looking down at where the next lane stripe is, an accident 1000 feet ahead will force emergency manuevers, compared to a driver who is watching ahead and can just quietly shift lanes or get off the road before the jam.

Re:hmm

[Anonymous Coward]

i see your myspace and raise you a GeoCities

Re:hmm

[mlts]

I've never understood the "gifts" thing. Someone pays a buck or more to slap a graphic onto someone else's wall.

Maybe FB could do something more meaningful with that, and have the ability for the recipient to get a serial number that is useful for something online, like $15 at iTMS, a month's free play time on ClicheQuest, or for brick and mortar shops, have the ability to print out a one use barcode that can be taken to shop for a store credit. End result is that people get meaningful gifts, FB gets a cut, and retailers get a customer with some money in hand to buy stuff.

Re:hmm

[aaron alderman]

They already have.

Re:hmm

[Anonymous Coward]

So another PayPal-style outfit to avoid.

Re:hmm

[StripedCow]

But now social networking sites ala FB are a dime a dozen.

I think it is only a matter of time until some more open, perhaps distributed networking system will emerge.

Right now, FB is tightly binding its users to itself, but with a more open system, users could move freely from implementation to implementation.

Re:hmm

[roguetrick]

Facebook now offers actual gifts through their gift system. I still don't see anyone actually using it. I just sent gifts to people when they were free to clutter up their page.

Re:hmm

[Anonymous Coward]

So, inventing your own currency, eh? Fed and banks don't like that, and there are enough laws in the book to put you in jail.

Have you heard of *any* legal exchange of virtual money and real money? No. It is not doable. Maybe it is doable if you have enough money, connection and experience to clear all the hurdles - then why don't you just open a good old bank.

Re:hmm

[ottothecow]

and half the advertising on facebook is really there just to give small payouts to the app developers to keep them making new facebook apps.

It is much easier to make money (at least to cover costs) from a facebook game where you run a restaurant than a flash game on runyourownrestaurant.com. The players are already there and the advertising infrastructure is already in place to give decent payouts.

Facebook's real income must come not from adsense style pay per click style ads but rather from having exquisite demographic data about every single customer which they can sell or package with a full on ad-campaign (something payed for at least partially in advance, not per click).

Re:hmm

[nacturation]

So, inventing your own currency, eh? Fed and banks don't like that, and there are enough laws in the book to put you in jail.

Have you heard of *any* legal exchange of virtual money and real money? No. It is not doable. Maybe it is doable if you have enough money, connection and experience to clear all the hurdles - then why don't you just open a good old bank.

You've never heard of Second Life and Linden dollars, as one of many examples?

Now for some vitamin W

[Anonymous Coward]

For WHO GIVES A FUCK!

*sighs*

It would be only fitting ;)

[sznupi]

Since stock market is a game of imaginary monetary values and FB involves large number of people playing imaginary social life...that could self propel itself nicely, yes/no? ;)

Re:It would be only fitting ;)

[mdwh2]

Yeah they should come over to Slashdot, it's the place to be if you want a great social life. Everyone on here are your real life friends, honest, unlike Facebook where it's all imaginary.

Re:It would be only fitting ;)

[icebraining]

When was Slashdot supposed to be a place to make friends? I come here for the news *cof*, old memes and car analogies.

Re:It would be only fitting ;)

[eln]

When was Slashdot supposed to be a place to make friends? I come here for the news *cof*, old memes and car analogies.

You mean...
You're not...m-m-m-my...friend?!
*runs away sobbing*

Re:It would be only fitting ;)

[nacturation]

You mean...
You're not...m-m-m-my...friend?!
*runs away sobbing*

Cheer up... you're a friend of my friend. *poke*

Re:It would be only fitting ;)

[mdwh2]

Yes that's my point. Since when was Facebook? Everyone I know uses it to keep up with their existing friends, and the idea of that being imaginary seems nonsensical. I never saw it as a place to meet new people (as opposed to say, OKCupid, which are clearly aimed at that).

Re:It would be only fitting ;)

[icebraining]

Maybe you don't, but most Facebook users I know have much more online "friends" than IRL.

Re:It would be only fitting ;)

[Anonymous Coward]

I put all my money into VA Linux stock during their IPO, then I had myself put into a chemically induced coma. Figured I'd wait a few years and all that VA Linux stock would make me a billionaire. Just woke up, anyone know how VA Linux stock is doing?

Re:It would be only fitting ;)

[darthflo]

Would you care to elaborate on that?

Many of my "friends" on facebook would barely qualify as "acquaintances" in real life, but I don't think there's anybody whom I've never met and still friended. I, too, don't see how Facebook is a useful tool to meet new people. It's quite great when it comes to keeping in touch with people you mightn't otherwise call or write to, but that's mostly it.

Of course it's going public

[Nursie]

It's at the peak of it's popularity and thus the peak of it's perceived value.

They'll "go public", the owners (founders and other investors) will make out like bandits and then retards^H^H^H^H^H^H^Hfund managers will invest money in it from all of our pensions and savings. The stock will change hands many times as it is speculated upon repeatedly until such time as the next big thing comes along and it takes a slow plunge to worthlessness and irrelevancy.

In the meantime the founders are rolling in (our) cash.

Re:Of course it's going public

[FooAtWFU]

So (quit the 401(k) and roll it over into an IRA and) take responsibility for your own savings. Heck, short-sell if you want. Just remember that the market can remain irrational longer than you can necessarily remain solvent.

Re:Of course it's going public

[dubbayu_d_40]

If I apply your reasoning, buying GOOG at it's IPO was a bad idea. As was MSFT, AAPL...

Re:Of course it's going public

[CarlDenny]

And pets.com, and webvan, ...

Re:Of course it's going public

[Darkness404]

I guarantee you that by the time the average 20-30 year old /.er reaches retirement age, Google, MS, Apple and most other "hot" companies will have either gone worthless, bankrupt, or otherwise not a good stock to have. Yeah, buying Google, MS and Apple when they went public made lots of people really rich really fast. But they are crap retirement stocks when compared to steadily rising stocks.

Re:Of course it's going public

[dr_dank]

So (quit the 401(k) and roll it over into an IRA and) take responsibility for your own savings. Heck, short-sell if you want.

IANYFA, but you can't sell short from an IRA account, you'll need a margin account. If you want to fund that margin account with your 401k proceeds, it will be a taxable distribution.

Re:Of course it's going public

[zippthorne]

And so we see the real point of IRAs and 401ks. To lock up your money in vehicles where other people can make it work for them.

Thank you, but "won't be taxed until later, when taxes' inexorable rise negates the supposed benefit of the lower income" is just not as enticing as it used to be.

IRAs are like cell phone contracts. You think you're getting a deal, but all you're really getting is less bargaining power.

Re:Of course it's going public

[zippthorne]

And how are you underwriting this guarantee? When can I expect payments?

Re:Of course it's going public

[radish]

If you don't trust the managers of whatever fund your money's in - move it. If you're totally risk averse put it in fixed income. Or hell - if you're so much better at stock picking that the professionals start your own fund. From what you say it should be easy and you'll be rich off all our money :)

Re:Of course it's going public

[mysidia]

It's possible to sell short in an IRA, but it's difficult / expensive to get an arrangement that will allow you to. Buying PUT options might be a better choice for betting against a stock, for a trader, provided you understand the mathematics, the risks, and requirements involved (including such risks as your broker automatically exercising an option at expiration if you fail to deliver notice to leave it un-exercised, or they fail to receive your order in time).

Generally, most brokers won't just let you as an individual open a margin account using a new IRA with them as custodian. You will probably need what's referred to as a self-directed IRA through a custodian you have paid to allow you the option of a self-directed IRA.

You will need a custodian for the IRA who is willing to let you do it, and a broker that is willing to allow you to do it, and you open the margin account with a brokerage through that custodian.

The thing with margin accounts, is they allow you to borrow money, and generate debt-financed income.

This leads to two issues with regards to the tax and other rules effecting IRAs:

(a) The IRA is a separate entity, no assets outside that IRA can be used as collateral for the margin debt. So if you massively leverage your IRA account, and manage to get into serious debt... you walk away, the broker has no recourse against you. So the broker will not be interested in opening this margin account, except under strict rules, and if you have loads of cash to invest with them.

You can't sign any agreement that gives the broker recourse against you for your IRA's activities, or recourse/any use of your income/ assets outside the IRA.

Any use of resources outside the IRA, for IRA business is referred to as a prohibited transaction, the consequence is severe:

If the IRS finds out about any prohibited transaction, they'll disqualify the IRA for tax purposes: it gets treated as if you took a distribution of the entire value of the IRA at the beginning of the year the prohibited transaction occured, which incurs an early distribution penalty, and tax is now overdue on any income from the IRA.

So brokers and your custodian should be very cautious in this manner. Your broker stands to lose money, if the IRA (with potentially limited resources) gets into debt.

Also, there is this second item, about (b) Debt-financed income.

Your IRA itself has to pay UBIT (Unrelated Business Income Tax) on what is referred to as the UDFI (Unrelated debt-financed income), if it makes more than $1000 of such income, just like all other organizations exempted from tax under 501(a) and 529(a) (Form 990-T). IRS Publication 598

Your custodian has to file the 990-T and pay the tax, if it is due. If there is not enough cash in your account to cover the tax, then your custodian must liquidate other assets in it as needed to pay the tax.

Re:Of course it's going public

[nacturation]

Did you invest in this one?

http://finance.yahoo.com/q/bc?s=LNUX&t=my&l=off&z=l&q=l&c=

Re:Of course it's going public

[Fear the Clam]

Try a Roth IRA--taxes get paid up front, no taxes are taken at the end*. Also try investing with a company/fund that diversifies risk. And if you don't like that company, move it.

*Sure, they could change their minds, but you really don't want to fuck with the survival money of old people. Many have firearms and figure they've already lived a full life.

Re:Of course it's going public

[Nursie]

It is easy.

Had I actually bothered investing in stock this year I would have at least doubled my money this year.

Reading slashdot and other tech press does give you an insight into this industry far better than fund managers have. Or the rest of the traders that, at the worst of the crash, clearly missed out on simple facts like big, cash rich, debt free corporations like IBM, Apple and MS were not going anywhere because of some petty recession, and as a result were seriously undervalued.

It's just very hard to find the right account to do this in the UK. The banks want you to use funds so they can skim money off at every opportunity.

Re:Of course it's going public

[cavebison]

They'll "go public", the owners (founders and other investors) will make out like bandits

Perhaps not - they need to pay off their incredible debts first. Personally, I think this IPO will happen because investors want their money back ASAP. FB has only recently started making as much money as it spends. That's incredible. So it's a long way off providing a return to their investors who, considering the following points, probably don't like how it looks:

- Overall, users see FB as "made for them", and free besides. Certainly not equated with spending money. It's so good at doing what it does, it can't (at least for the end-users) be changed into anything else. Efforts at creative marketing, if they work at all, fall far short of expectations. Yet it staggers me why FB doesn't charge for business and group accounts, like Meetup does. So many users - surely businesses would gladly pay to have a presence in the mix.

- Sites which run more on popularity than application won't always be popular, and massive social networking sites aren't so rare. Although FB (at least in the West) has almost become as ubiquitous as Google, the latter meets an absolute need and has eggs in many baskets. FB is just a social networking site; it hasn't diversified and its user base is mainly small social groups who could very easily migrate elsewhere.

- FB users, and those of other social sites, think they own the damn thing. They collectively protest at advertising schemes and even changes to the UI. This is all great and democratic, but advertising doesn't operate well in that environment. It might be feeling like "too much hard work" to FB's investors as they try to monetise the process. Imagine, in the real world, mass protests against billboards or ads during TV programs. A bad environment for advertising.

So I think investors have made an assessment and decided to "make the best of" the situation as it is, because it might not get any better. They want to see a return, not a status quo. How much Zuckerberg et al will make out of an IPO, if anything, is completely unknowable. A Facebook IPO will happen because investors are becoming restless - they want a return and don't want to keep carrying the can.

Re:Of course it's going public

[Zearin]

It's at the peak of it's popularity and thus the peak of it's perceived value.

It is at the peak of it is popularity and thus the peak of it is perceived value.

Hmm...

An eIPO often seems like

[al0ha]

a clear indicator that the coolness, thus the use of a site, has or is reaching its peak. Sounds like the officers want to get some sweet IPO action going to cash in before Facebook goes the way of all the other flash-in-the-pan popular sites which have preceded it. Facebook is sooooooo uncooool now that my grandma and every stupid marketing firm is on it!

Re:An eIPO often seems like

[greensoap]

I am not a fan of Facebook, but lets think about what you said. What other site has risen to the level of popularity that Facebook has? And have those sites disappeared or lost popularity? We can start with Yahoo I suppose. Still huge, still around, and a completely different set of services offered. Geocities? eh, maybe but they were only popular with a segment of the internet population at a time when being on the internet was not cool. (Plus I never cared for Geocitie's pages) MySpace? While certainly their status has declined, hey are still kicking. Plus, Facebook actually pre-existed MySpace, then experienced a decline to MySpace, and has now far surpassed MySpace.

I would argue that AIM and ICQ are the closest analogies. Except that Facebook replaced them. Those services were designed to connect people and now Facebook does that (arguably better). Sure some people still use those services, but a lot of people just use Facebook for those things.

I guess my point is, please name the flash-in-the-pan popular sites you are referring to that have reached Facebook's level of pervasiveness in society? I only ask, because I have been on the net since '90 and cannot think of another and I am really trying. I am not saying there isn't a site out there that I am forgetting or that there isn't a site that I never knew about, but I would be really surprised.

Slashdot has been around a long time and has a dedicated following, is it a flash-in-the-pan popular site? I mean, /. is really a place for people who were/are on the forefront of the emergence of the Net into our lives. Can anyone think of any single site that crosses more culture, economic, or age brackets? Say what you want, but they did something right. And picking themselves up from their bootstraps to comeback from near-defeat at the hands of MySpace is something to be respected.

Re:An eIPO often seems like

[FooAtWFU]

Facebook is also a lot better at keeping itself current on the Web than properties like MySpace and AIM. AIM took care to lock down its protocols to outside agencies, trying to use it to build the AOL brand - but it wasn't strong enough, so it backfired, and that didn't help much. MySpace as a site is a stinking pile of garbage - not even the people, just the HTML - they can't do technically interesting things. Facebook, on the other hand, has done significant outreach to developers, even beyond stupidity like Mafia Wars. Significant sites are on board. Heck, you can log on to external sites with your Facebook account now. That's federated identity management, Kyle! And things like the infamous Beacon - despised by some, sure, but definitely a sign that they're extending their reach into interesting places. (To potential shareholders, that is.)

Twitter has a bit of a shot but I think it's a little too much of a one-trick-wonder. If there's one social-media-networking thingy today that's got serious money potential, I'd say Facebook is it.

Re:An eIPO often seems like

[Grimbleton]

My grandma hates Facebook... because the news told her to.

Re:An eIPO often seems like

[koiransuklaa]

You say that Facebook has done significant outreach to developers. That may be true in the sense that Facebook users get some added value, but it isn't visible to a non-user: in that sense they are exactly like AIM, making sure people on Facebook cannot interact with people outside.

Facebook is only different in that they've promised to act otherwise, so I'm giving them the benefit of doubt. However, the XMPP suppport was promised a year and a half ago...

Re:An eIPO often seems like

[Suhas]

Slashdot has been around a long time and has a dedicated following, is it a flash-in-the-pan popular site? I mean, /. is really a place for people who were/are on the forefront of the emergence of the Net into our lives. Can anyone think of any single site that crosses more culture, economic, or age brackets? Say what you want, but they did something right. And picking themselves up from their bootstraps to comeback from near-defeat at the hands of MySpace is something to be respected.

When did you stop talking about /. and start talking about FB in there? Honestly can't tell.

Re:An eIPO often seems like

[u38cg]

Indeed. The point about Facebook is that they have effectively reimplemented everything that most people use the internet *for*: staying in touch, sharing photos, chat, email, and propagating news and links. If they manage this effectively and keep their network effect, I can't really see them losing significant ground.

Re:An eIPO often seems like

[roguetrick]

The Newscorp?

Re:An eIPO often seems like

[Anonymous Coward]

When I said "can you think of a site that crosses more..." I was talking about Facebook. That was just poor writing on my part

Re:An eIPO often seems like

[Grimbleton]

I don't know, she just said she heard on the news it was bad so she disapproves of it and anyone who uses it.

I asked her what, specifically, and she couldn't answer. Nobody ever can. What happened to well-reasoned arguments and real thought when it comes to opinions?

Re:An eIPO often seems like

[roguetrick]

Theres plenty to hate about facebook. The unscrupulous app developers, the slow gnawing nature of giving up some privacy for some functionality, the insane nature of having rapid access to others completely vapid thoughts, disagreements with the direction the company wants to go toward(as seen by their user agreement moves), or just hating the population in general and not wanting to be anywhere near them.

Not a "critical" step

[mattack2]

The summary is wrong in calling this a "critical" step. It is a voluntary step, for the founders (and whoever else gets the higher class stock) to have more control over the company. But it's not mandatory (which I would infer by it being a "critical" step).

Re:Not a "critical" step

[bughunter]

It is a necessary step for the ultimate merger of YouTube, Twitter, and Facebook.

The resulting company would, of course, be called YouTwitFace.

Re:Not a "critical" step

[Anonymous Coward]

You don't happen to listen to Dr. Laura, do you?

Re:Not a "critical" step

[zmaragdus]

Good point in discriminating between mandatory and voluntary. Mayhaps I should have not phrased it as such when I wrote it. Still, I personally believe a company's founders would be foolish to not make such a restructuring before a split. I suppose they could simply allocate themselves massive amounts of stock before and IPO under which the stock structure has all stocks equal. Doing it in classes gives them, among other things, the ability to put present an illusion of the [founders'] amount of stock being more insignificant than it really is (though it wouldn't fool all that many people). Then again, I'm just an electrical engineer and am not even on Facebook anymore, so what do I know?

Re:Not a "critical" step

[bughunter]

No, but my wife does, and she told me this joke.

Who needs facebook

[zlel]

Who needs facebook when there's slashdot?

Re:Who needs facebook

[MichaelSmith]

I need facebook so my wife, sister, mother, etc don't inhabit /.

Re:Who needs facebook

[Rick and Roll]

People who want to get laid?

Re:Who needs facebook

[Penguinshit]

Facebook allows you to limit your trolls to YOUR trolls.

Re:Who needs facebook

[Penguinshit]

No, that would be Facefuck and Twatter.

Re:Who needs facebook

[Anonymous Coward]

Slashdot likes it (thumbs up icon).

Re:Who needs facebook

[fightinfilipino]

People who want to get laid?

impossible. people on facebook are too busy growing crops in FarmVille or doing epic crimes in Mafia Wars or making creepy comments on attractive friends-of-friends's photos to have time to have mere sex.

Re:Who needs facebook

[Taur0]

Who needs to get laid when you have slashdot?

Re:Who needs facebook

[uid8472]

No, that'd be Craigslist.

Google nuthuggers at it again

[Anonymous Coward]

Here we are in a thread that has nothing to do with Google but noooo... the Google nuthuggers are out in force and have to find a way to bring Google into every single article.

Stable Business Plan?

[GumphMaster]

The illusory "growth" that comes from a float (should it happen) is all well and good but it is no substitute for an actual product/income stream. Exactly what is Facebook's perpetual and stable income stream? Catering for fads and skimming advertising money off the top is one thing, but lasting more than a while in that line of work with an audience of with a well-formed, fickle throw-away mentality is quite another.

As you can possibly tell, I'm one of those people that really don't see what Facebook offers that is valuable.

Re:Stable Business Plan?

[FooAtWFU]

My guess is that they'll continue the relatively unobtrusive ads, and try sell enhanced capabilities (access to demographics, marketing information) to interested companies in some manner or another, so that they can cozy up to Facebook's users. That sort of thing is where the big money is.

Have you seen any sites where you can log in with your Facebook account yet? That's federated identity management, Kyle! Whatever else, they're not just resting on their laurels over there.

The other reason for doing this

[BlueBoxSW.com]

The other reason for doing this is if you plan on distributing profits based on shares.

You can give more money to some people while giving the illusion of ownership to all.

WTF

[Anonymous Coward]

Thanks, asshole, for referencing an article behind a paywall. (Yes, I could pay $1.99, but NO I won't. WSJ is not worth it.)

Re:WTF

[e9th]

Until they go all Murdoch on us, you can always try Google's cache.

Re:WTF

[zmaragdus]

Thanks, asshole, for referencing an article behind a paywall. (Yes, I could pay $1.99, but NO I won't. WSJ is not worth it.)

{shrugs} I got to it just fine without paying for it. I don't remember exactly what I did to get there when I was briefly researching the topic before posting it, but it worked and I didn't pay for anything. If you're really that worked up over it, perhaps you should have looked a little farther in the Internet. Various newssites (few of them pay sites) had articles on the same topic.

Next time you call me an asshole, please refer to me as "The Asshole." There's more than one reason I play the trumpet.

{tips had} Evenin' to ye

They are trying to go public

[GWBasic]

Facebook is trying to go public. About a month ago, one of their recruiters was trying to get me to sign an NDA for an on-site interview; and he refereed to their impending IPO as the justification for the NDA.

I didn't sign the NDA.

Re:They are trying to go public

[QuantumG]

Ya know that won't stop the SEC from bringing charges against you for tipping.

Re:They are trying to go public

[GWBasic]

Huh?

Re:They are trying to go public

[Nikker]

How can someone fault you for not signing something? What ever the retard told him that was confidential before signing the NDA was his / her own dumb fault.

Re:They are trying to go public

[QuantumG]

The SEC doesn't care if it is confidential or not. If you know about an impending IPO and you tell someone, and they act on that information by trading, you're tipping, they'll bust you.

Re:They are trying to go public

[ubercam]

What? Should Slashdot be sued for "tipping" because an article was posted here about it? What about the Wall Street Journal, for writing about their stock reclassification? Sue them too?

When it goes public, everyone has the same opportunity to buy it, at the same time no less. What kind of advantage could one gain from knowing about it ahead of time? It goes public when it goes public, not one minute beforehand.

Re:They are trying to go public

[GeckoAddict]

If you know about an impending IPO and you tell someone, and they act on that information by trading

And how exactly would you trade this information? Facebook isn't publicly traded (yet), so I fail to see how you could use this info. Sure, you could short competitors, but I can't really think of any.

Re:They are trying to go public

[Estanislao Mart�nez]

What? Should Slashdot be sued for "tipping" because an article was posted here about it? What about the Wall Street Journal, for writing about their stock reclassification? Sue them too?

The stock reclassification is public knowledge, as is the existence of that WSJ article. The original poster in this thread claims to have insider knowledge obtained from somebody in the employ of the company. Those are very different.

Why all the haters?

[catchy_handle]

When you grow up, you lose touch with friends. Not everyone is googleable 20 years later. You can only find some people when they come to Facebook.

The default security isn't bad, and don't play the stupid apps. I'd pay $39.99/yr to lose the ads, with that they could build infrastructure.

The recent Live/News feed debacle prompted me to buy a new dead-tree address book to fill in. I hope they don't go away, but want to remain in contact with a few good friends if they do.

Re:Why all the haters?

[Anonymous Coward]

I'd pay a similar amount to FB if they would ditch the ads and provide me with some of the following:

1: Dump their existing app API and start over from scratch with a least privilige model. I know this is hard because advertisers want user data to sift through, but apps don't need to know everything about a person and their friends list. However, what it does is get people to either not bother using any apps, or create bogus FB profiles to play the apps under.

2: More granular permissions. It would be nice for me to be able to have something I wrote about a crazy party go to everyone but my cow-orkers, without having to completely block the cow-orker group completely from the wall messages.

3: I'm sorry, but a username and password just isn't secure enough these days, even if it is over SSL. FB should do what eBay, PayPal, and other places do, and offer an offline ID token. This way, if I'm on a public terminal and someone grabs my password, it will do them little good unless they have some sophisticated man in the middle attack system in place.

4: The ability to have the whole website go through SSL. With more ISPs hopping on ad injector products, not to mention more sophisticated MITM attacks, it can't hurt to have FB info be protected end to end.

5: More emphasis on security. A compromised account is a fraudster's dream. They can send messages to all friends with some excuse of breaking down or being in jail, and needing $50 for a tow/bail/bribe. More brutal criminals can tell if friends are out of town and then know if someone's house is a juicy targer. Yes, this seems far fetched now, but as the economy tanks, criminals will become more and more sophisticated using FB info the same way they case out homes to burglarize or invade.

The wise move.

[unity100]

Apple wouldnt have had all those problems if they were smart enough to do that at the start. Instead, they fired their main vision guy, only to have to call him back in the end to save them.

look at how it worked for google. look at other similar examples.

these extraordinary successes are not happenstances. they happen because their creators have a vision and spirit. get them out of the equation, and the machine starts to falter.

institutional investors may stand away as much as they want from this by the way. actually, it would be better if they did so. for 'institutional investors' were the ones who fucked up global economy with that global hedge fund scam.

Not only that

[Anonymous Coward]

But google does not make money on just merely advertising but many other areas of business as well.

Facebook has 1 business model, advertising. That is it.

take the money and run

[sohp]

Facebook Inc. converted its existing stock holdings into different classes of stocks (Class A and Class B) designed to give certain shareholders more power than others.

Translation: a few people well-connected with the founders and some VCs will make off with most of what money there is now, while the getting is good. Everyone else, like the employees that were enticed to go to work for FB with promises of "valuable stock options", will get diddly squat.

Facebook might not even IPO, they might sell out to someone like Rupert Murdoch, with the people holding the better class of stock getting a hefty payday, while everyone else will just get a handful oh-so-valuable shares of News Corp thrown at them.

Common vs. Prefered

[c0d3r]

Isn't that the difference between Common Stock and Preferred Stock? Common is an actual percentage of ownage, while Preferred is a dilutted slice of the pie. I've vested and exercised 1/2 of some preferred options on a low cents amount, although the company chooses to remain private, hence, I effectively loaned them money at best.

Re:hmm.Christmas gifts,shoes,handbag,Tshirts,ect..

[coolforsale127]

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Facebook marketing

[Anonymous Coward]

Facebook has a nice marketing techniques, they provide unsolvable captchas and once you are sick of filling them in the only option to go around it is to provide your phone number, (that will be used for AD purposes ofcaurse).

http://www.youtube.com/watch?v=HH45Jb8lmSA

Private vs. public doesn't make difference.

[Estanislao Mart�nez]

Once it's a public company, it has a fiduciary responsibility to bend its users over to try and get as much money for its shareholders as it can.

I second Phat_Tony's response to you, but I have to add one really important fact you're missing: private vs. public isn't relevant for this. All corporate officers, be it at private or public corporations, have a fiduciary responsibility toward the shareholders.

To your credit, though, in private corporation the shareholders and the officers tend to overlap a lot more, so there's often fewer conflicts of interest in this regard.

No, don't quit the 401(k).

[Estanislao Mart�nez]

401(k) plans may suck, but you're investing pre-tax, and your employer may be matching your contributions, in which case you'd be leaving money on the table by not participating. Over the long term, the investment return on the tax savings and an employer match are more important than the mediocre performance of your employer's sucky 401(k) plan. Here's better advice:

1. First priority is to contribute to the 401(k) plan up to your employer maximum match. Make sure that you pick the lowest-cost, most diversified investment choices offered in the plan (i.e., the ones that suck the least). Index funds are ideal, so if your 401(k) offers some, pick those up.
2. Once you've made the match, your second priority is to put further contributions into an IRA from a good provider. I'll insist that you go with Vanguard.
3. Once you've filled up the IRA, then if you have extra money to invest, put it into the 401(k), so you get more of the tax savings.
4. When you leave your employer, make sure to roll the 401(k) over to an IRA at a good company like Vanguard.
5. Learn about asset allocation and rebalancing, and practice them religiously.

Those two things are orthogonal.

[Estanislao Mart�nez]

IANYFA, but you can't sell short from an IRA account, you'll need a margin account. If you want to fund that margin account with your 401k proceeds, it will be a taxable distribution.

IRA and margin accounts are two orthogonal things. An IRA is a tax-advantaged retirement savings account, and an margin account is an account that allows you to borrow against your securities. There's no legal reason you can't have a margin account within your IRA.

Don't actually do it, though. Margin accounts are mostly just a mechanism for losing money.

Major flaw - anonymity desired

[penguinchris]

Under your plan, suddenly no one will casually browse other peoples' profiles. Maybe I'm just paranoid, but I wouldn't be comfortable browsing profiles if I knew they might know (even if they're good friends and it's perfectly benign) - and your story about picking up a girl illustrates the point.

If she was actually interested, then yeah, that's valuable to both parties - they'll both know the other person's probably interested. But what if the girl wasn't actually interested, and just is in the habit of accepting friend requests? As you note, if they've got mutual friends, she'll probably accept. But then, she sees this guy checking out her profile all the time - facebook stalking her - and she thinks he's a creep.

She's better off not knowing that he's checking her out, I'd say.

Re:Major flaw - anonymity desired

[darthflo]

There already are sites that will let you see who looked at your profile, so it's not a novel thing and it doesn't start a whole new era of creepiness.
Actually, thinking about it, this shouldn't even be hard to do on facebook. There's this magnificent API, embeddable into profile pages... Methings I just might try something out tonight. Wouldn't want to make the app public as it's against facebook rules, though.
Back to topic & bad analogies: Seeing a list of whom looks at your profile is like the mirror on the wall behind the liquor bottles in a bar. Sitting right at the bar, Greg's buddy Sally is sure to pull some looks. She knows, you know, the bartender knows best. Out of chance, AmigaMMC & a few of his friends ended up at the same place as her, sitting on a table, having a few drinks and laugsh. Ever so casually, AmigaMMC will tend to have a look at Sall^Wthe bar. Now if Sally were to turn around at look him in the eye, he'd look away quickly, right. But Sally's a smart gal. Checking through the mirror, she notices he actually does seem interested (in a non-creepy "we're in a bar, let's have a drink & talk about stuff") way. So she might send appropriate signals. Like, for example, placing her empty glass in AmigaMMC's line of sight. Or making sure she's marked as "Relationship status: Single; looking for: Men"... And if she's actually creeped out, a mean look ("Status: It's complicated") or a stroll down the block to another bar (Are you sure you want to remove AmigaMMC from your friends?) will take care of that.

The most important factor is to keep some kind of plausible deniability going for as long as possible. "Don't I know you? Lemme buy you a drink" can be cancelled with "Funny, you DO look exactly like Kim from High School, well, it was fun talking to you, have a good one". A "quick glance" is easily explained with "I thought I've seen you at xyz, just wanted to make sure. It wasn't you. Have a good one." (and done). It's harder to explain half an hour of looking through each and every picture in their gallery, but fb won't probably implement that.

All in all, the dating game requires her to know he is checking her out and him to be able to deny it. "xyz looked at your profile" is a good way to start. Especially for those who get cold hard cash selling that info.