The Facebook juggernaut has been rolled in style. Its IPO has set the benchmark for the future tech companies. How will it change the giant and how will it impact you? Read, below the top 15 things you must know to understand the hype and fears around it. 1. BIG Money Will Be Involved. The launch price is $38.00, but it is the close price which is keeping everyone excited. Reports say, it could be as high as $54.00. This means a record profit of $14.00 per share, in a single day. Moreover that’s not the end of the game. It is just the beginning. To be precise, it means big big money for all the stake holders. This also means Marc Zuckerberg will be leapfrog into the league of extraordinary rich men. May be, top 20, or top 15! My guess is as good as yours. The company expects to raise $16.00 billion dollars via its IPO and that will put its valuation close to $104 billion (Highest ever for a U.S. company, at least at the time of its offering)
2. More Pressure To Create More Money. The money which Facebook IPO will attract, will come from the pockets of the investors. In return, they will expect it to be more profitable, to push the price further up. This will put extra ordinary pressure on the Facebook, to create more and more revenues. The books will always be required to show company’s sound financial health.
3. More Ads As a user, be prepared to see more ads. As an advertiser be prepared to shell out more money, as the market will get competitive. Despite of the fact that GM has decided to stop advertising on Facebook, the advertisers will continue to flock it unless and until a serious issue crops up.
4. More Pressure To Keep The User Interest Alive. Facebook will increase the ads and will always be under the constant pressure to keep the “holy grail” of its business (read, user’s interest) intact. It will have to do constant,tight rope walk, between appeasing the advertisers and not letting it become a nuisance for its users.
5. Have to Figure Out Mobile Advertisement Riddle. As of now, more than 50% of the users, use Facebook via mobile. As per the market forecast, with each passing day, more and more people will use it from Cellphone instead of desktop. Facebook is yet to come out with a decent , non disruptive mobile advertising feature which improves its advt revenues and keep the investors delighted.
6. Will Find Better Ways To Measure Impact Of Its Advertising. GM pulled out of Facebook saying that Facebook advertisements made little impact on its targeted segment (the car buyers). As per WSJ – ” GM will continue to promote its products on Facebook, but without paying the social-media company.” This means, the strategy will be content driven via fan pages or groups. Facebook needs to come up with a system which can accurately convey the actual impact of its advertising on the end sale of a product.
7. Reduce its Reliance on Zynga. Facebook’s marriage with Zynga is going like a dream love story (12% of its revenues come from it) however, you can’t run a billion dollar business based on such a relationship. That becomes too risky. Facebook will try to develop its own gaming platform and be prepared for any eventuality.
8. Rise in Sponsored Stories. Even though sponsored stories haven’t been much of a success, investor’s pressure to create more revenue will force Facebook to force feed you with sponsored stories, may be, even in between your news feed.
9. New Partnerships Facebook will explore possibilities in other advertising areas. Direct ads can not remain the sole source of revenue. Facebook will explore further possibilities of revenue generation, which means mutually beneficial partnerships in search and content distribution of music or video.
10. Reinforcement Of Social Search. Google remains Facebook’s main rival. To counter the surge of Google, Facebook will not shy away from launching its own search engine. Having said that, Facebook’s own search engine will be different to what Google offer. It will be based on social search. Google and Bing too made similar efforts recently to introduce social aspects in search results. It will be interesting to see, how Google will be able to survive the onslaught in the midst of Facebook’s rising popularity
11. Introduction Of Paid Services. Facebook will never become paid, however, it will introduce, premium features at a price. It will not just remain restricted to that, it will go for premium apps, virtual gifts or games and charge a small amount. Given the sheer volume of active user base it has, it can make a killing even by charging its users in the one digit bracket.
12. Compromise On Your Data. If advertisers will be asked to pay a premium, they will not do so unless Facebook gives them additional lucrative details about its users. Your data will be compromised and chances are could be without your knowledge.
13. Rise In Privacy Issues. To make everything appear fine, facebook will bring subtle changes to its terms and conditions and also user privacy. This will lead to digital age conflict of service provider vs user’s privacy. Tones of arguments for and against will be issued. However, at the end of the day, no one can deny that, the privacy of the users will get compromised.
14. Be Prepared For A Dramatic Fall. Not all good things last forever. Everything is looking rosy at the moment. This may not remain always like this. The internet economy is quite fickle. One scandal, one breach of security or one game changer and the stock price will tumble down like anything. The fall could be as epic as the rise. Stay cautious.
15. Be Prepared For The Surprises. Internet is a level playing field wherein everyone gets equal opportunities to disrupt the market and become the market leader. Google did it, so did facebook, so can anyone else. The next Facebook killer or any other market changer, must be round the corner, may be a 15-16 year old, who must be busy programming right now. He/she will catch the world by surprise by its arrival. Be prepared for such a surprise and be willing to embrace the change.