Facebook Inc. could file papers for
its initial public offering as early as next week, people familiar with the
matter said, as anticipation
mounts for what is likely to be one of the biggest debuts for a U.S. company.
The deal, seen as defining moment for the latest Web investing boom, could
raise as much as $10 billion and value the social network between $75 billion
to $100 billion, said people familiar with the matter. A valuation of $75 billion would be
below earlier expectations. Facebook's final valuation will be determined by
a variety of factors, people familiar with the matter said, such as investor
demand for social media, the IPO market and the health of the European
economy.
The website, which in less than eight
years has attracted more than 800 million members, has changed the way people
across the globe communicate, from organizing political protests to sharing
baby pictures. Facebook's revenue
is driven by its advertising business, as big brands rush to the site to
interact with consumers through display ads and fan pages. Facebook has been
able to increase its world-wide advertising revenue from $738 million in 2009
to $3.8 billion in 2011, according to estimates
from research firm eMarketer. It isn't known if Facebook is profitable.
Mr. Zuckerberg had been reluctant to push forward with an
IPO. People familiar with his thinking said he has been fearful of the damage
an IPO could do to the company's culture. He wants employees focused on
making great products, not the stock price, they said. But outside forces are
partly pushing his hand. Facebook executives began to realize in 2010 that
Facebook would have more than 500 shareholders by the end of 2011, which
would trigger a regulatory
requirement that Facebook start publicly reporting financial information. Mr.
Zuckerberg decided it made more sense for Facebook to go public and reap some
financial benefit from an IPO, rather than stay private but have to release
its financial information, said people familiar with his thinking.
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VOCABULARY
1. Anticipation (noun) - a feeling of
excitement about something that is going to happen
Example: He looked
forward to the party with anticipation
2.
Valuation (noun) - the estimated
value of something
Example: The
property has a valuation of ¥ 10 billion.
3. Revenue (noun) - money that a
business or organization receives over a period of time, especially from
selling goods or services [↪ income]:
Example: The factory
lost revenue because of the strike by the workers.
4. Estimates (noun) - a guess that you
make based on the information you have about the size, amount, etc., of
something
Example: At a (very)
rough estimate, the job will take three months.
5. Reluctant (adj.) - feeling or showing
doubt about doing something : not willing or eager to do
something
Example: We
were reluctant to get involved in the project.
6.
Trigger (verb) - to cause (something)
to start or happen
Example: The timer
was set to trigger the bomb in exactly one hour.
QUESTIONS FOR DISCUSSION
1.
What do you think is the value of Facebook at present?
2.
Tell us about popular social networking site in your country
3.
Would you like to buy shares of Facebook stock should it go public?
