Facebook Flotation: five key figures including Bono set to make billions
Published 01/02/2012 | 10:49
AS FACEBOOK prepares to go public, five key figures, from Bono to LinkedIn founder Reid Hoffman, are set to make billions.
Facebook is poised to fire the starting gun on a flotation that's set to value the world's biggest social networking site at up to $100bn (€76bn).
The company that Mark Zuckerberg founded in his room at Harvard University in 2004 is expected to file to sell shares to the public as soon as today.
Bono is also the co-founder of investment firm Elevation Partners. Their stake in Facebook is almost certain to be valued at over a $1bn when Facebook goes public. The star is likely to make as much from that process as U2 has earnt in its entire career.
The paperwork that Facebook will file with the US financial regulators should for the first time lift the lid on the finances of a company that has amassed 800m users in under a decade, courted controversy with its privacy policies and already had an Oscar-winning film made about it.
The IPO, which could see Facebook look to raise up to $10bn, will also provide a windfall for the Wall Street banks that are advising Mr Zuckerberg and the company's other senior executives.
Morgan Stanley, which helped bring networking site LinkedIn and online video game pioneer Zynga to market last year, is expected to have a lead role alongside Goldman Sachs. Fees are likely to run into hundreds of millions of dollars.
Although the IPO will deliver Mr Zuckerberg a paper profit of several billion dollars, going public will also provide several challenges for a company that has been happy to reshape the way people communicate online from the relative secrecy of its headquarters in Palo Alto, California.
Like the chief executives of other public companies, Mr Zuckerberg will be under pressure to ensure that Facebook's quarterly results meet, or exceed, Wall Street's expectations.
The flotation will also put Facebook's efforts to turn users into cash under greater scrutiny than ever before.
While potential investors will be cheered as more and more corporations increase the pool of money they allocate to online advertising, and Facebook in particular, analysts say it holds threats for Facebook. The pressure it will be under to lift advertising and other revenues needs to be weighed against the risk of deterring users.
This week, though, is more likely to be swamped by the hype surrounding what should be the biggest technology flotation in history.
The other beneficiaries are:
Facebook’s first President is widely credited with turning Mark Zuckerberg’s project from a dorm room operation to a global business. Veteran Silicon Valley investor Parker has previously put money into Spotify, Napster and online address book Plaxo. And if ‘The Social Network’ is to be believed, he’s also the man who got the name changed from ‘thefacebook’ to simply ‘Facebook’.
Increasingly the public face of Facebook, Sheryl Sandberg mixes media-savvy with real business experience. Currently Chief Operating Officer, Sandberg was previously a Vice President at Google and Chief of Staff and the US Treasury. She is widely credited with turning Facebook into a profitable operation that relies on advertising.
CityVille, FarmVille and Mafia Wars are just three of the hugely successful games that more than 200million users regularly play on Facebook, and they’re all owned by games company Zynga. CEO Mark Pincus, also an investor in Facebook itself, drives his staff famously hard and is married to Ali Pincus, the founder of American homeware sales store One Kings Lane.
The co-founder of LinkedIn was one of Facebook’s very first investors, and instrumental in arranging its first funding round. Digg, Flickr and Last.fm have also attracted his interest and Hoffman has gained a reputation as one of the sharpest minds in the venture capital world.