Facebook has been coy about any initial public offering plans, but a $500 million investment from Goldman Sachs and a Russian investor means the company is likely to become publicly traded in the not-too-distant future.
The New York Times reports that the Goldman Sachs investment puts Facebook at a $50 billion valuation. Facebook is worth more than eBay, Yahoo and Time Warner (not to mention a bunch of other companies). And why not? Facebook has vast reach on the Internet and will be the No. 1 U.S. site at some point.
With the dough, Facebook in theory would never have to go public. It has the funding to hire, build data centers and compete with Google. However, we’ve seen this movie before. Google followed a similar path and there was so much transparency and scrutiny that the company had to go public. When your privately traded shares are as liquid and popular as publicly traded ones it’s about time to launch an IPO.
The other elephant in the room is that the Securities and Exchange Commission is poking around on the private market for Internet shares. That inquiry will likely include Facebook, Twitter and Zynga.
In many respects, Facebook is already public. The company might as well make it official.
