2004; a year when Mark Zukerberg and Eduardo Saverin in Harvard hacked into the systems of their peers to steal pictures and started a small site known as Facebook. Though it was first restricted to Universities/colleges but then was made public. Now after 8 years from its foundation, it has 85 million users around the globe. By far the World’s most popular Social Network.
The alluring 27 year old hacker turned youngest billionaire (Net worth: $17.5 billion and owns 24% of Facebook) is now launching the IPO (Initial public offering). It would value Facebook.Inc as much as over 100 billion dollars. In short it would make its employees millionaires and Zukerberg, as pundits predict; world’s richest man. The shares are floating in wall street at around 50 and increasing day by day leaving all the silicon companies behind as well as main competitor Google.Inc. The company that has nothing to sell and derives 85% of its profits from only advertisements produced around $1 billion profit last year from $3.7 billion in revenues.
With Facebook going public it would unleash a new wave of wealth across Silicon Valley. It would not only benefit Facebook shareholders but also banks managing the offering of Wall street like Morgan Stanley, J.P. Morgan Chase & Co. and Goldman Sachs Group Inc.
Managing the pressure of a public company would be a challenge for Zukerberg and Co as Facebook’s costs and expenses are going up faster than revenue. And the one higher than the other (Expenses vs Revenues) in seesaw would decide the future of this company.
Zukerberg to his potential Shareholders said
“We don’t build services to make money; we make money to build better services,”