Mark Zuckerberg’s energies have gone into not blowing his top. Lately, he has been preening the world’s largest social network company to be transformed into a blue chip business. For eighteen months, as CEO of Facebook, Zuckerberg is reshaping the appearance and behavior.
Enamored with Gates, Zuckerberg hinted that he wanted to emulate Microsoft, “There was a time in Microsoft’s history when their main goal was to put a computer on every desk. This vision casting is how we want to run the company, changing the world as we go.”
In the second quarter of 2012 Facebook hopes to go public with its stock, with an IPO that has the potential of raising $10 billion, a valuation of $100 million or more. In light of the IPO, Zuckerberg is fighting to prep the company to look the part.
The showings of Groupon Inc. and Zynga Inc. as poor IPO debuts has placed a weight around Facebook’s neck as it takes the IPO stage. Zynga dropped lower than its IPO price immediately, and Groupon ended its first day at 12 percent lower.
Being able to make public offering is one of the toughest goals for a budding business to achieve. When you talk about matching off with the top dogs, like Apple and Microsoft, it a wonder any companies have a strong enough will to make it. Yet, many insiders at Facebook have revealed the desire of the company to emulate the big guys, following in their footsteps of meticulousness, influence, and staying power.
Facebook is even role-playing based on fictitious quarterly earning calls, preparing to field assaults by analysts, if the need should arise. David Ebersman, CFO of Facebook, has provided professional auditing services to the company quarterly. He has steered the company around the accounting obstacles that stranded Groupon and Zynga.
Ebersman, is unsure what he would be able to provide for an IPO, but he has expressed the desire to see Facebook move in this direction. In the meantime, Facebook is not simply replicating Google’s achievements, with an electronic approach to the offering.
There is an entire image shift going on from the top down. Even Zuckerberg gave up his trademark Adidas flip-flops for Brooks running shoes, a dark blue tie and sports coat. Image is not enough, according to many analysts. Some point out that in spite of Facebook’s scale and strong brand identity, that the company’s long term success will depend on operating with profit through large fluctuations.
The current miracle of Facebook is the small number of employees it takes to support the $4 billion turnover. At 3,000 employees, Microsoft and Google are wasteful pigs, 90,000 and 31,000 respectively.
Blue chip stocks are known for reliability and tech IPO’s usually do not stay in this category for long. However, Facebook might make history. It has some elements that give it a fighting chance, namely, its scale. Reliability, though, has yet to be proven, and that is the crux.
User privacy still plagues the company’s reputation. This may be the limiting factor in achieving their amazing goal.