Facebook Files for IPO

After years of rumors and speculation, Facebook has finally filed for a public stock offering. Facebook plans to raise $5 billion in an initial public offering, or IPO. The price the stock fetches is anticipated to value Facebook at somewhere between $75 and $100 billion, making hundreds of Facebook employees instant millionaires.

Facebook’s annual profit of $1 billion in 2011 doesn’t actually support such a high valuation. Investors will be gambling on the value of the data Facebook collects on its over 800 million users. And a gamble it is, since privacy legislation at home or abroad could have a profound impact on what Facebook can do with the information it collects. As Facebook goes public, it will be under more pressure to increase profits, and is bound to push the limits of its user’s tolerance regarding privacy.

As Facebook goes public, it is obligated to disclose previously private information about how the company is run. Founder Mark Zuckerberg is clearly the man in charge at Facebook, and plans to continue being the primary decision-maker after the company goes public. He describes Facebook’s approach to product development as “The Hacker Way” – a process involving continuous improvement and iteration.

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