A whiff of dotcom fever
With 2009 having been such a bumper year for social networking sites it’s no surprise that there’s talk of some going public this year.
Top of the list is Facebook, which reached 350 million users last month and has overtaken all its former rivals in revenues from advertising. In 2010 the site is expected to rake in $605 million from brands, compared with $385 million on MySpace. The recent decision of founder Mark Zuckerberg to create a dual-class stock structure, with most of the voting rights being maintained by him and other existing shareholders, is a pretty good indication that he plans soon to go for an initial public offering.
If that goes well we can expect to see similar moves by Linked In, whose co-founder and chairman Reid Hoffman has let it known that a speedy IPO is his preferred exit strategy, and perhaps also Twitter, whose ability to demonstrate revenues, for instance in its $25 million deal with Google, is whetting appetites.
It will be interesting to see how well all the hype translates into hard cash. If dotcom history is a reliable guide, there will be no shortage of takers for social media share offerings, but whether buyers see longterm results, only time will tell.
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