Bloomberg reports that Facebook is to – probably – put off an eventual IPO until at least 2012, according to multiple people familiar with the matter.
Waiting at least another year (and a half, approximately, to be clear) would reportedly give CEO Mark Zuckerberg more time to follow through on his vision without too much public scrutiny and the implications thereof, attract more users and developers, book more sales and work out other issues, such as the user privacy kerfuffle and legal matters.
All this talk about Facebook going public at some time reminds me of similar chatter that has surrounded professional social networking company LinkedIn for years. In both cases, founders and management have repeatedly stated they’ll only IPO when the time is right, and repeatedly expressed that gaining more users and ramping up revenues are the current focus.
And in both cases, media outlets continue to speculate about when they’ll go public anyway.
Don’t get me wrong, both are bound to IPO at some point, and they’ll be high-profile and plenty impactful events. But my assumption is that for both Facebook and LinkedIn, the people who are to make said decision really do want to wait for when the time is right, and they most probably have clear milestones in mind to determine when that is.
It’s hard to predict the future, so it’s near impossible to determine when exactly those milestones will be met and everything falls into place, provided one would even know what the ideal situation in the minds of the decision makers is. Investors and other equity holders, e.g. employees, obviously want to cash in at some point, and secondary markets aren’t going to keep appeasing them in the long run. So yes, there’s going to be pressure, and increasingly so.
But who knows what will happen between now and, say, the next three years? Even if Bloomberg’s sources are extremely familiar with Zuckerberg’s thinking and plans, they too don’t know how quickly Facebook will grow, or what other events might on the other hand make Facebook want to delay an eventual IPO until 2013 or later, even.
It’s fun to speculate, but these reports need to taken at face value as such.
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