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The Coming Facebook IPO

May 09, 2012 | By Jonathan Block

There is no lack of advice and opinions on the relative merits and hype of the upcoming Facebook IPO. I even read someone comparing the potential of Facebook share prices to Apple’s. However, the problem with that viewpoint is that Apple sells actual stuff, while Facebook sells…ads? Granted, such a statement is not entirely accurate, particularly in light of the revenue (roughly 30 percent) Facebook makes from its cut of digital sales on the site. But while Facebook is a social media company, its business model is more closely aligned to the “media” portion of that description.

While Facebook has about 850 million members, its growth has slowed. But the interest in Facebook will continue to fuel buzz for other social media companies (technology or not). While this may not translate to a dotcom-like surge in IPOs, it will certainly make many social media providers attractive acquisition targets. These companies will emerge as the real winners, with Instagram (bought by Facebook for $1 billion) and Radian6 (purchased by Salesforce.com for $326 million) already experiencing such windfalls.

Jonathan Block

Jonathan Block is Vice President, Product Development at SiriusDecisions. He has has worked for more than 25 years as an IT and cybersecurity leader, product manager, and an industry analyst. He manages the global product development organization for SiriusDecisions’ technology solutions. Jonathan built and managed agile technology teams that increased productivity, collaboration, cybersecurity and regulatory compliance. He also developed key models and frameworks that enable B2B organizations to understand, evaluate, and implement appropriate marketing and sales technologies. In addition, Jonathan has advised executives on the role of technology to help drive sales and marketing integration and enterprise alignment. Follow Jonathan on Twitter @jblock.

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