Facebook IPO: Privacy Implications of Facebook Going Public

by NowPublic Staff | January 31, 2012 at 08:56 am

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When is the Facebook IPO?

Facebook is gearing up for an IPO that will dwarf that of Google. If it achieves its target valuation of $100 billion, it will be the 6th largest IPO in US history, just behind AT&T. (See a list of the 10 largest US IPOs)

Mark Zuckerberg, arguably in over his head as it is, will find himself at the helm of a massive ship, with a board of directors looking over his shoulder the whole time. So, when is Facebook filing for its IPO?

Rumor has it that Facebook will file its IPO papers as soon as February 1, 2011. Facebook shares would trade publicly as soon as May 2012. Facebook's early staff will become overnight millionaires (after working for years with the stock-option carrot extended in front of them).

What Facebook IPO Means for Your Privacy

When Facebook goes public, the social network's operational priorities will change overnight. Facebook will no longer be about building community, or connecting people, or whatever other euphemism it's been using for "collecting behavioral data".

A post-IPO Facebook will be about one thing, and one thing only: monetization. More specifically, monetizing your data.

If you think that Facebook has been cavalier about your privacy concerns in the past, wait until the company's health directly depends on it. When no longer on investor life support, Facebook will live and die by its stock price. To that end, keep in mind that Facebook has no tangible product, only user information.

To that end, Facebook is already demonstrating a lack of understanding of how to capitalize on your data without losing... you.

"From an investment point of view, we see Facebook's decision to force the new Timeline layout on their users as a negative," Zarzycki said. "The lack of discernment by the company to launch this product upon its users, who value choice and the freedom to choose, makes us question the management's direction as the IPO nears."

Once public, Facebook will lose whatever shred of coolness it had left, and a vacuum will be created for Facebook alternatives, several of which (such as Diaspora) are already in development. So, while Facebook begins the slide towards becoming Myspace, a new startup will become the new Facebook.

It's a circle-of-life thing.