Facebook IPO - It’s Closer Then You Think - Would You Invest?

Disclaimer: This information has not been confirmed by Facebook, only third party sources that I personally trust. Take this information with a grain of salt.

Lately the blogosphere has been actively chatting about Facebook not interested in selling. Board member Peter Theil has been quoted as saying they believe Facebook is worth the equivalent to MTV, $8 Billion. In addition to these reports there have been rumors that Facebook is considering an IPO. This interested me to the point that I called up two close friends who work at seperate major Investment Banks. To my surprise, both of them have confirmed that Facebook has been in “serious talks” with both of their companies about a late 2007 IPO.

Does this mean it will happen for sure? Absolutely not. But there is more of a chance to it happening then I originally thought. With this in mind, I thought it would be fun to play a hypothetical game. Lets assume that Facebook announced an IPO, would you invest?

I definitely think Facebook is in a strong position. They have captured what I believe is the most critical crowd in social networking; college students. They receive CPM rates far and above Myspace and other major social networks. They have diversified their ad platforms offering both national advertising, and smaller more targeted local advertising. And so far Facebook isn’t nearly as infested with spam as Myspace.

The big question is, are their current users as fickle as most people think? Will they switch to a newer service in a heartbeat? In my opinion, no. Facebook users are entrenched and invested in the site, and as we saw from the “feed fiasco”, users are very loyal. Eventhough the facebook population was up in arms about privacy issues, a very small percentage of them actually quit or switched to a new SN.

Currently there is no social network out there that is compelling enough to convince current users to switch. The only one that I think has a far off chance is Loopt, who still has many hurdles to overcome. Even if a new compelling network was created, what is to stop Facebook from implementing the same features?

So what do you think? Would you invest?

[tags]Social Networking, Social Network, Social Media, Facebook, IPO, Facebook IPO, Brian Balfour[/tags]