As you probably know, because its has been on every news outlet ad nauseam (including my little corner, hah), Facebook has gone public today at 11AM EST. In a valuation worth over $100 billion dollars, this is a big day that should help define what social networking is really worth.
However, not everyone is convinced by that estimated value. In the days running up to the IPO several reports came out highlighting GM's departure from buying ads on Facebook as well as the social network's dismal click through rates (rate at which people click ads they see). GM saw that they were getting a better return on money spent with using Google Adsense. On average, an ad is clicked once for every 1,000 views. Adsense rakes in 4 clicks per 1,000 and Facebook limps in garnering half a click for every 1,000 views. This looks pretty bad, but advertising strategies can be reworked and improved without fundamentally changing much. With a demanding crowd of well-heeled investors, Facebook will certainly be pressured into addressing this problem first.
Speaking of investors, going public is both good and bad for Facebook users. Having public investors will keep Facebook pushing forward and innovating new additions and enhancements to their network. The site should become more attractive and better at keeping you entertained. However, this can come at a cost. The demand to optimize profit could significantly affect the direction that Facebook goes. In the realm of privacy, you can expect Facebook to start doing more with your friends lists, location history and behaviors. The barrier between your personal data and the greater corporate world is going to dissolve. Whether you are okay with that is up to your own feelings on privacy but many will be angered by the intrusion.
Targeted advertising should get more accurate while also getting more annoying. You should expect to see ads pop-up in every nook and cranny of Facebook. Not just traditional ads either. When one of your friends likes a brand or purchases something from a Facebook connected e-commerce site you might see posts from them on your news feed encouraging you to buy this or that. This can blur the line between actually networking/following your friends and being duped into looking at an ad. Facebook should be careful here. If the news feed becomes lousy with advertising this could affect the amount of time people stay hooked in a session or might even discourage them from returning soon.
To me, it is very unclear what could happen here. Either this IPO is a big success and Facebook joins the special club of long-standing and powerful American brands or it could leave a lasting sour taste in the mouths of Facebook users.
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