Netflix CEO Reed Hastings is now the sixth member of Facebook’s board of directors. In a statement, Hastings says he’s excited to “take advantage of all of the opportunities ahead.” Facebook CEO Mark Zuckerberg says he lobbied for Hastings to join the team because “he has built a culture of continuous and rapid innovation, something we share and work hard to build every day.”
It’s altogether very possible that Facebook sees a like-minded and successful resource in Hastings and simply values his ideas and what he can bring to the table. But recent rumors plaguing Facebook would lead us to believe otherwise.
Preparing for an IPO
Facebook is all set for a 2012 IPO. Why that’s of any uncertainty at this point, we’re not sure: In January, in a rare press release offering some insight about its business, Facebook said as much. “[Facebook] expects to start filing public financial reports no later than April 30, 2012.” The only hitch we could think of is the potential change of SEC regulations. If the proposed amendment is passed, companies wouldn’t have to file IPO until they reach 1,000 shareholders (it’s currently set at 500). Whether or not this changes Facebook’s plans is unknown, and the social network hasn’t said anything alluding to going public since the January statement.
Bringing Hastings on board, however, could signal Facebook is preparing to file its S-1 form. When a company preps to go public, it’s very common to bring industry veterans into the mix. Hastings has gone through the IPO process twice, once with Netflix and once with Pure Software. Having the knowledge to chart the often murky waters of shedding private company status is incredibly valuable.
Of course, there is a distinct possibility Facebook and Netflix are partnering on a video streaming project for Facebook. In March, Facebook revealed it would rent Warner Bros movies that could be streamed through the site and bought with Facebook credits. Facebook is clearly become something of a media hub, with its rumored Spotify integration and music dashboard, as well as its notable social gaming platform. Hastings would also see some benefit to possibly integrating Netflix into Facebook, as he’s mentioned wanting to improve its social element. And Netflix’s increasing competition from the streaming sector means a Facebook partnership could give it an added edge over challengers. Adding Hastings to the board means it can kill two birds with one stone: Implement a media center and secure some guidance for a 2012 IPO.