Facebook IPO Validates Social Media

As Facebook finally made its Wall Street debut yesterday morning, the world watched with anticipation of what was the biggest tech IPO to date. But this launch was much more than Mark Zuckerberg securing himself as one of the top 20 richest people in the world (a net worth of $20 billion @ 28 years old isn’t a bad gig) – this is validation. Despite a less than explosive opening, Facebook currently holds the record as the largest valuation of a newly public company @ $104 billion. The sheer scope of this IPO serves to legitimize social media marketing to those who are still weary. It acts as proof that social media is not a fad — it is not only profitable, but is also a serious marketing medium.

Now that Facebook is a public company that needs to answer to investors and not just the whims of its designers and executives, will it continue to take the risks that it has been known for? Now that producing profit for its investors is an added responsibility, how will FB manipulate its ad offerings to generate more income?

Here are my predictions:

  • Investments & Research: Facebook’s IPO raised a whopping $16.1 billion USD (third largest in US history). With all of that capital, I imagine that the company will be reinvesting a large portion of its profits into its research/development and the acquisition of smaller tech firms. This larger budget also opens up the opportunity of Facebook taking on the role of venture capitalist/angel investor – think Google.
  • Mobile is a must: As we previously pointed out (read about it here) , mobile is trumping computer use in terms of social networking.  In fact, social networking applications are used more than any other mobile application. I would be incredibly surprised if Facebook didn’t start seriously implementing ads into its mobile offering and strengthening its mobile platform. Perhaps this could include the development of more mobile-based apps to join its recent Instagram acquisition.
  • Greater Focus on Paid Advertising: Now that Facebook has to answer to investors, the company will most likely increase its paid ad options in order to increase overall revenue. It doesn’t help that General Motors recently decided to pull all of its advertising on the site (ouch). I wouldn’t be surprised if FB released its own version of Google’s AdSense – after all, who knows your customers’ browsing habits better than Facebook at this point?

I’m interested in your thoughts on the situation…How do you think Facebook’s IPO will affect social media marketing? Are you planning to invest? What apps would you be interested in seeing them develop?

To find out out how Social Imperium can make Facebook work for you, please do not hesitate to contact us.

[Header Photo: Reuters]

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