With the impending IPO for Facebook anticipated this Friday May 18, one has to wonder if Facebook will be able to continue doing the things that has made it great (SEOconsult.com). Throughout its years as a private company, Facebook has generally focused on their users first. Their approach has been to create, maintain and enhance a great user experience that allows people to connect to each other as well as have a more personal experience with brands.
In addition, Facebook has also focused on creating a platform that allows other entities (people, brands, organizations, etc.) to connect with people outside of the context of Facebook itself using connected tools such as Like buttons, Open Graph integration and Single Sign On (SSO).
In order for Facebook’s users to maintain the perception that Facebook is all about them, the amount of advertising that is shoved down the user’s throat has been tightly controlled. Utilizing such capabilities as the ability for users to self-identify what advertisements are most relevant to them, seeing what friends are interested in, as well as simply minimizing the intrusion of advertisements into the user experience (look ma’, no popups!) has created an environment where the user feels in control.
With an anticipated value of nearly $100 billion at the IPO, Facebook will have a nearly 100:1 price-to-earnings ratio ($1 billion in revenue last year). At that ratio, it will take years of aggressive revenue growth to get that number down to a reasonable level. With this type of P-E, the pressure will be on to get Facebook’s revenue up as quickly as possible.
We can only hope that Mr. Zuckerberg, et al. who have been making the good decisions that have gotten Facebook where it is now will be able to keep the shareholders at arm’s length. In doing so, they can continue to enhance the user experience to provide a venue where customers and brands can truly come closer together. Otherwise, we could see Facebook deteriorate into a hodgepodge of ham-handed short-sighted advertising platforms that disregard the user and become just like every other shouting used-car-salesman style publisher.