Rumours of Facebook’s impending IPO have prompted discussion about what the company intends to do with the billions it would likely raise after listing, but local tech analysts believe it won’t change all that much in the way the Australian business is run.
While the Facebook IPO is likely to lead the company to focus on getting more SMEs to buy Facebook’s advertising products, a big push into this Australian sector appears unlikely.
“I don’t think they’re going to change their strategy locally,” Telsyte research director Foad Fadaghi told SmartCompany this morning.
“The product is developed at a global level and then switched on to other regions as required.”
“We also have to remember Australia is a very expensive country. You’ll probably see investments here directed at revenue-generating projects, but apart from that probably not a lot.”
Last week, the Wall Street Journal reported that Facebook is planning to file with the SEC this week for a listing that could raise the company as much as $US10 billion, with shares to start trading in May.
It’s been a long time coming for the social network, which has been rumoured to have been working up to such a move for some time. The company’s advertising network has grown exponentially and more small businesses are viewing it as an alternative to Google’s AdWords.
But Fadaghi says raising an extra $US10 billion wouldn’t necessarily change how the company does business here. The Australian office houses some sales people and its head, Paul Borrud, recently resigned.
“The thing to bear in mind is that while the Facebook advertising system is a little less developed than Google’s, it’s not far off in terms of its sophistication.”
“A lot of thinking and development went into self-service advertising when Sheryl Sandberg came on board, and that’s going to continue to improve over the next few months and years.”
The challenge, Fadaghi says, is making sure the company continues to grow despite being under such public scrutiny.
“It hasn’t really affected how Google operates, but a lot of the company’s strategy will be under scrutiny and that could change things.”
“There are also questions as to whether Mark Zuckerberg would be appropriate to take the company to the next level. These are questions you have to ask after any IPO.”
Fadaghi says what’s more important is the flow-on effect a Facebook IPO would have for other businesses.
“I don’t know if there will be anything specific related to Australia if an IPO occurs, but what you’ll see is a flow-on effect for other entrepreneurs and it could present some more developers working on Facebook applications.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
