LinkedIn went public with a bang last week, opening at 84% above its initial offering price on the first day of trading and, after shares continued to climb, closing out the day valued at an impressive -- and unexpected -- $9 billion.
Within the next year, Facebook is expected to follow LinkedIn's lead and become a public company. Beyond speculation about what LinkedIn's success means for Facebook's IP or other social media companies like Zynga, Groupon and Twitter, experts wonder how going public will change the social media giant as a company. Once shares of Facebook are being traded on the open market, the company opens itself to greater scrutiny and a level of transparency that could expose its weaknesses.
"Suddenly everyone will be able to see Facebook's business, how profitable it is, the risk factors and how the company is managed and governed," says Luke Taylor, a Wharton finance professor.
The same day that LinkedIn made its debut, Facebook chief operating officer Sheryl Sandberg described her company's IPO as "inevitable." "It's a process that all companies go through," she said at the Reuters Global Technology Summit, according to press coverage. "It's ... the next thing that happens. People used to ask us if we were going to get sold. People have stopped asking that question.... No one is buying us; we're going public."
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