The Facebook IPO: Does it matter to you?

facebook nasdaqThe Facebook IPO has been looming on the horizon for some time now. Recent speculation has increased the ever-building hype around the company’s S1 filing, and the latest rumors say that the process could begin as soon as Wednesday. According to the Wall Street Journal, insiders suggest as much and say the company is expected to raise somewhere between $75 and $100 billion. 

Beyond the fact that this means some very fortunate people are about to become very, very rich, what does the Facebook IPO mean?

For users

Largely, a Facebook IPO means very little for users. The site will continue to serve the same purpose: no one is going to entirely uproot and change the site’s direction, and none of the long-harbored Facebook fears are going to come true. This includes, but is not limited to, users being able to see who has visited their profile and being forced to pay for Facebook.

Of course the company’s structure will change, and there are competing opinions about what the trickle-down effect will be. Yes, the site will become beholden to shareholders, and that could mean a very different governing attitude. When you have to answer to these people more, the way you make decisions inevitably has to change.

At the same time, Facebook is going to come into a lot of cash, and that could mean everything from features everyone’s been holding out on (the Facebook phone, a fully-fledged, built-in media dashboard) to little things, like server upgrades to improve the back-end.

But it’s not like Facebook didn’t have investors to answer to before, or didn’t have enough money to scoop up small startups to its pleasing. It’s just that the degree of both of these things will increase.

Sure, there are concerns that new pressures put on the site could lead to a sacrifice for user experience, or that Facebook could be overrun by its shareholders and become stagnant. These are long-term consequences, though, and apply to every company that goes public. We’re going to call them unlikely based on Facebook’s dependence on users and the fact that it’s probably learned from its predecessors’ mistakes.

For shareholders and employees

Of course the real winners of a Facebook IPO are the company’s shareholders. Early investors like Peter Thiel and Sean Parker will be handsomely rewarded for their insight, and CEO Mark Zuckerberg obviously stands to rake in quite a bit of cash. If Facebook is able to raise the projected $100 billion, then Zuckerberg will go home with $25 billion.

When a company IPOs, there’s a sort of rearrangement that happens, and that means the Facebook team will see some shake-up. Employees are shareholders (to varying degrees, depending on their roles within the company), so they stand to make money off of this move. Some of them have been waiting until Facebook IPOs so they could take the money and pursue their own startup.

For the market

This infusion of Facebook talent back into the market has its own effects. All these very talented people who decide to take their plans and will infuse some new innovation and ideas into the market. We’ve already seen Facebook employees like Dustin Moskovitz (co-founder of Asana) and Adam D’Angelo (founder of Quora) part ways with their former job to strike out on their own, and now some new veterans from within the company – who have some nice, new money – will do the same.

the facebook ipo who or what does it matter to bursts bubbleAdvertisers will likely see the price of the Facebook Ads service increase. Facebook will have revenue goals it must meet to keep shareholders happy, and an easy way to do this is via its advertising platform. They will probably also be trying to drive business to it, with new features and controls for users. Expect to see the Open Graph fill out as well.

Let’s lump investors in with the market as well, since they are such a catalyst in its growth. Unfortunately, only an elite crowd will be able to get their hands on Facebook stock. If you’re interested in getting a piece prior to the IPO, unless you know someone with a share and they owe you a favor (on the scale of you once saved them from a burning building), you’re probably out of luck. We do advise checking out SecondMarket, where certain individuals can qualify as “accredited investors” and look for Facebook stock for sale. The odds still aren’t great, but it’s worth a shot. And after the fact, it will be trading so high and shares will go so fast that it will be hard for your average Joe to be a part of it all.

This system of successful companies going public later and later is what’s contributed to this: lots of popular and big startups would IPO earlier, and the public would be a part of their growth, and more hands were in the investment pot.

And this cycle very well could continue: Facebook has set something of a precedent for the social startup, and its IPO process is going to be envied by new companies.

For California

Last but not least, Facebook’s home of California would profit from its IPO. Capital gains taxes (which is when stock sales are taxed) would translate to millions of dollars for the state. “In the coming months, the state’s revenue forecast will need to be adjusted somewhat to account for the possibility of hundreds of millions of dollars of additional revenues related to the Facebook IPO,” analyst Mac Taylor said regarding California’s budget proposal. 

To put some of that into visual context, check out this infographic from AccountingDegreeOnline

facebook-ipo
Features

Netflix’s latest price increase heralds the end of streaming’s golden age

Netflix’s recent price rise is just the latest in a string of signs that streaming’s golden age is nearly over. As more services enter the fray, content will be further partitioned, signaling the end of streaming’s good old days.
Smart Home

Busted: Facebook Portal gets 5-star reviews from company employees

It's fair to say that Facebook's Portal smart display received a tepid response at launch, so it was something of a surprise to see lots of glowing reviews of the device on Amazon. Turns out some were written by Facebook workers.
Mobile

Rekindled yet again, Nokia’s next-gen phones offer more than just nostalgia

HMD Global, a startup that designs and builds Nokia Android smartphones, wants to put the Nokia brand name back “where it belongs.” It helps that it’s made up of ex-Nokia employees. We go behind the scenes to see how HMD formed.
Deals

Best tax software deals from TurboTax, H&R Block, and more

Do you dread doing your taxes? Luckily for you, there are plenty of tax software options available to guide you through the process. And guess what? Some of them are even on sale today! Check out deals from TurboTax, H&R Block, and…
Social Media

Instagram now lets you post to multiple accounts in one tap

Instagram for iPhone now lets you post to multiple accounts at the same time. It's not the regram feature that many users have been asking for, but it could prove useful for some users who manage more than one profile.
Social Media

No yolk! A photo of an egg has become the most-liked post on Instagram

Until this weekend, the most-liked post on Instagram was of Kylie Jenner's baby daughter, which has around 18 million likes. It's now been knocked off the top spot not by a stunning sunset or even a cute cat, but by an egg.
Social Media

Invite your friends — Facebook Events can now be shared to Stories

Facebook is testing a way to make plans with friends to attend an event -- through Stories. By sharing an event in Facebook Stories, users can message other friends interested in the event to make plans to attend together.
Social Media

A quick swipe will soon let you keep bingeing YouTube on mobile devices

The YouTube mobile app has a new, faster way to browse: Swiping. Once the update rolls out, users can swipe to go to the next (or previous) video in the recommended list, even while viewing in full screen.
Photography

Starting your very own vlog? Here are the best cameras to buy

Any camera that shoots video can be used to vlog, but a few models stand out from the crowd thanks to superior image quality, ergonomics, and usability. When it comes to putting your life on YouTube, here are the best cameras for the job.
Social Media

Twitter extends its new timeline feature to Android users

Twitter users with an Android device can now quickly switch between an algorithm-generated timeline and one that shows the most recent tweets first. The new feature landed for iPhone users last month.
Social Media

YouTube to crack down on dangerous stunts like the ‘Bird Box’ challenge

YouTube already bans content showing dangerous activities, but new rules published by the site go into greater detail regarding potentially harmful challenges and pranks, including certain blindfold- or laundry detergent-based stunts.
Social Media

Nearly 75 percent of U.S. users don’t realize Facebook tracks their interests

Did you know Facebook tracks your interests, including political and multicultural affiliations? According to a recent Pew study, 74 percent of adult users in the U.S. have no idea Facebook keeps a running list of your interests.
Mobile

It’s back! Here’s how to switch to Twitter’s reverse chronological feed

Twitter has finally brought back the reverse chronological feed, allowing you to see your feed based on the newest tweets, rather than using Twitter's algorithm that shows what it thinks you want to see. It's easy to switch.