Peter Kafka

Recent Posts by Peter Kafka

Facebook's IPO Waiting Game Gets a Little Longer–"Probably" Not Going Public in 2011

Perennial question for Facebook CEO Mark Zuckerberg: When are you going public? Perennial answer: Someday, probably. But I’m not in a rush.

Now a new report from Bloomberg puts a finer point on it. Citing three anonymous sources, it says the social network will “probably” push off an IPO until 2012.

That certainly sounds plausible. It’s not clear that Facebook needs to raise any cash for operations, given the booming ad business it has finally gotten off the ground. And more money will be coming in the door this year when the company launches its own payment/credits system for virtual goods.

Zuckerberg has structured his board, and ownership structure, so he retains control of the company, so investors who would agitate for an IPO don’t have much leverage. And if the company does want to sell shares, it has plenty of options in the private market.

Assuming Bloomberg’s story is correct, there is at least one significant ripple effect here. If Facebook doesn’t IPO for another 12 months or more, that reduces the pressure on social games giant Zynga to go public too.

The two company’s finances are tightly intertwined–for now, Facebook represents most of Zynga’s revenue, and Zynga is a big chunk of Facebook’s business. Which means that whoever goes public and opens their books first is also opening the other company’s books to some degree. There’s an interesting game of chicken going on there, and it’s worth keeping an eye on.

Meanwhile, if you’re dying to buy Facebook on the open market, you may be able to do it in a roundabout way next year anyway. Russian investor Digital Sky Technologies, which bought a chunk of Facebook last year, is reportedly planning on a 2011 IPO.


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