Facebook’s Awaited IPO

Facebook’s first-half revenue roughly doubled to $1.6 billion, underscoring the world’s largest social network’s appeal to advertisers.

Net income in the first half of 2011 came to almost $500 million, according to a source, who wished to remain anonymous because privately-held Facebook does not disclose its results.

Facebook’s strengthening results come as investors have pushed the company’s valuation to roughly $80 billion in secondary markets, with many industry observers expecting the company to go public in 2012.

With more than 750 million users, Facebook has become one of the Web’s most visited destinations by consumers who spend hours on the site every month sharing photos and videos and conversing with friends.

Its popularity among consumers and advertisers has pressured entrenched Web companies such as Yahoo, whose board of directors fired CEO Carol Bartz on Tuesday for failing to revive the company’s fortunes.

But competition is heating up. Search leader Google launched a rival social network in June that attracted more than 10 million users in its first two weeks.

Facebook declined to comment on its financial results. Looks like their IPO will be out sometime in the first quarter of 2012. This could be one of the most dangerous IPO offerings to come in a long time, Here are the reasons why:

1) A heavy dependence on Zynga who is going for their own IPO, and may offer their games to other companies such as the
Famed Google+

2) Google+ taking large market share while Google+ is still in Beta in just 3 months Google+ reach a 1.8 million User’s
by Invite only and projections are that they will surpass the 750 million users facebook has within 30 days

3) This is the most important of them all what “To DO NEXT” Facebook is a very Simple business Model. Build a Social Network, Have a lot of members, offer the members Games and App’s so the stay on the site for hours a week. and Offer advertising and Business will pay to to advertise. Okay this works they are proof this works. But when does it become old? MySpace, Friendster, Hi5 all Social Networks and all had the same Story from begining to Middle to the End. Right now Facebook is in the Middle.

Friendster didn’t see MySpace as a threat, as a result Friendster Died
MySpace and Hi5 Didn’t see Facebook as a threat they both Died

And now Facebook is not viewing Google+ as a threat. Facebook is relying on Zynga Games to keep it’s user’s, Two problems with this 1) Zynga has to keep coming out with new games, They release a game millions play and with in 6 to 12 months just look at Farmville and Cityville numbers today from a year ago. How long can Zynga keep putting out new games and what happens when Zynga decides to change the rules and wants to charge Facebook for the use of their Games?

As a private company Facebook would do better to avoid this question, as a publicly traded company they won’t be able to avoid this question.

So do I think Facebook’s IPO is going? 100% they can’t avoid it, Would I invest in it? Yes right from the Start. But you will have to watch this one and be ready to pull the Trigger and Sell if Dark times come.

Disclosure I am not Affiliated in any way with any of this Companies list here

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