Facebook Adds 96 Million Shares, Will Privacy Get Worse After IPO? 191
AlistairCharlton writes "Facebook has made yet another amendment to its S-1 filing, adding a further 96 million shares, pushing its initial public offering up to a potential maximum of $18.4bn (£11.5bn). In what is the eighth amendment to its S-1 filing with the Securities and Exchange Commission, Facebook has also increased the number of shares allowed for over allotment, up from 50.6 million to 63.2 million." Facebook will have a lot of pressure to increase revenue after it goes public. jfruh writes in with a story about how that will impact their privacy policies. "There's been a steady drumbeat of panics over the past few years involving how Facebook uses the personal information you give it; nevertheless, someday you'll look back at 2012 as the golden age of Facebook privacy. That's because, once Facebook has its IPO, it'll come under huge pressure from the markets to extract more revenue from its business. And with display advertising not generating game-changing amounts of money, Facebook has only one valuable resource: your data, which is going to be monetized as hard as possible."
Re:Let's compare this to Google's IPO (Score:5, Interesting)
Both Facebook and Google share many business practices and monetizing practices. While Google had the unfortunate timing for their IPO (2004) after dot com bubble burst, the exact same thing could had been said about them. Many slashdotters, however, still believe that Google does the right thing.
I'm not sure who these "Many Slashdotters" are that you refer to -- some sort of expert panel on the morality of corporations I guess -- but they certainly are ignorant, and haven't been reading the website for which they are named. Google has become quite bent, particularly relative to their starting point, and that subject is discussed regularly and extensively on these forums (typically with a few ignorant twits starting the discussion by saying, "But you all love Google!" followed by a chorus of, "Are you daft? No we don't."). From cozying up to the U.S. surveillance state to embracing censorship in China, Google has become far more morally flexible since their IPO.
And bear in mind, Google started off as a hard-core moralist corporation. They were the poster-boys for "what a scientist/moralist company should be" until Eric Schmidt and the public shareholders came along. Facebook is starting with no discernible principles to act as a rudder.
Of course, I agree with your assessment of the investment potential. But that says a great deal more about the flaws in our economic policies than it does about whether Facebook is good for long-term United States growth.
Re:Let's compare this to Google's IPO (Score:5, Interesting)
Okay so I know you're just another of those high UID, never posted before anti-Google troll-shills but I can answer this question:
"What I cannot understand is why Google gets a free pass on this while slashdotters absolutely hate Facebook."
There are a number of reasons, but for me they are:
Despite all the FUD your PR company likes to spread, for all the theoretical things Google has done wrong over the years I've never actually suffered anything detrimental as a result of Google's theoretically evil actions. I've never suffered spam, I've never had any problems. Contrast this to Facebook and the theoretical problems turn into actual problems - I have had Facebook illegaly sell my data in breach of the UK's data protection act, I have had it recommend people who it could only have associated with me by illegaly gathering data from elsewhere. I know these things for a fact because we're talking about data which I have not stored on Facebooks systems, e-mail addresses that I have only used in certain places and so forth.
Further, whilst Google certainly does do wrong, it also often tries hard to do right, in contrast I can't think of anything positive that's over and above it's business interests that Facebook has done. I've also yet to see anyone quite as obnoxious and who quite so desperately believes his own bullshit as the guy following the discussion at about 49minutes into this documentary:
http://www.youtube.com/watch?v=zeOlO_2nddY [youtube.com]
Still, it's fun watching him squirm.
Oh, it probably doesn't help that Google came from a couple of guys doing some university research, whilst Facebook came from a guy who stole and cheated left right and centre either. That's not really the greatest starting point for a company who wants to get all our data, whether given it honestly, or whether it's obtained it illegaly. On the illegality thing, here's a hint as to what I'm referring to: under the data protection acts of many countries, including (all?) those in Europe, a third party cannot give a company permission to hold your data, yet Facebook uses EXACTLY this method to gather data on people. The previous automatic opt in on allowing apps to gather friends data even if those friends haven't used that app and hence have no relationship with the 3rd party company in question is an example of this.
Hateful geek comment (Score:5, Interesting)
Currently there are amount 800 million people (a very impressive number!), but there is room for over 6 billion more. And those won't be joining MySpace, Google+ or Diaspora, they will join Facebook because that's where everyone is.
Last time I checked 800 million is way less than 6 billion (about 13% of 6 billion), which kind of contradicts the statement that 'that's where everyone is'
Working in investment industry, I ...
Oh is that where the fuzzy math comes from?
Before I reach for my wallet, could mister financial industry explain how facebook's revenue (around 1bilion) justifies the current valuation of 100 billion? Short of making every single living person on the planet a facebook member and then quadrupling their net income per user (currently at about $1) I don't see how any investment made now will break even in the next 5 years.
Re:Will it? Yes. And here's why. (Score:4, Interesting)
That's just the free float (Score:4, Interesting)
By increasing the size of the IPO, they are offering closer to 15% of the shares, rather than 10%.
At a price of $34/share, the market cap will be north of $120 billion, and the price on Day 1 could spike much higher than that, when all the rubes jump into the secondary market.
Facebook may never again have a market capitalization greater than it will on its first day of trading.
Re:Let's compare this to Google's IPO (Score:5, Interesting)
Actually, Facebook's profit margin and debt-equity ratio are about the same as Google's. However, their revenue and profit are around 1/10 of Google (IIRC) while their estimated valuation is about 1/5 (?), so they are likely overvalued.
FB is going down. Hard. (Score:5, Interesting)
Facebook is caught between a rock and a hard place with regard to user privacy. They already take a lot of flack from users who don't like what they perceive as Facebook's lax privacy protection. Facebook can't simply dilute it further without risking a flood of protest from its users. It can't afford that. That's not to mention the various state and federal privacy regulations already in place that will also constrain them.
Oh, and don't count out Google+ as competition just yet. Google isn't going to declare defeat in the social media space any time soon. They recently completely revamped the Google+ interface and have shown that they're in it for the long haul. They will be waiting for Zuckerberg & Co. to stumble and give users an excuse to jump ship. I suspect they won't have to wait long.
Of course, the investors will be howling for Facebook to bring in the numbers, especially now that GM has announced yesterday that they are cancelling all of their advertising on FB due to its lack of effectiveness. You can bet that move has caught the attention of every other large advertiser. Facebook is in trouble. They have very little maneuverability to enhance their revenue stream and a lot of pressure to do so. Something's got to give and I predict it will not be pretty for either FB's bottom line or their stock price.