Facebook triggers industry "shock" development

Absrtact: A year ago today, social networking giant Facebook was listed as one of the most anticipated IPOs in nearly a decade. The IPO, which valued Facebook at $104 billion trillion, is 100 times times more profitable than its earnings. Before the IPO, the market hyped Facebook,

A year ago today, social networking giant Facebook was listed as one of the most anticipated IPOs in nearly a decade.

The IPO, which valued Facebook at $104 billion trillion, is 100 times times more profitable than its earnings. Before the IPO, when the market hyped Facebook, analysts predicted that the shares would soar after Facebook's listing, and that buying its shares would be easy to profit, and investors ' desire to buy would be so provocative that, to meet these buying needs, Facebook is set to increase the number of shares it will issue to the public by 25%.

On the morning of May 18, 2012, Facebook founder and CEO Mark Zuckerberg, Zuckerberg, rang the Nasdaq opening bell at the California headquarters campus, until the day that investors had been haunted for months or even years.

Then the plot turns with the bell.

On the day, the Nasdaq trading system's technical glitch triggered a 30-minute delay in Facebook trading, with Facebook opening up 13% to reach $43 in the run-up to the deal, but the good start didn't bring luck. In the 30-minute opening, its share price plunged close to a 38-dollar offer, and it would be difficult to predict how much the stock would fall if the day was not followed by a push to buy a Facebook-listed underwriter, Morgan Stanley. Facebook's closing price remained at $38.23 a day, barely a break.

While Facebook's share price climbed to more than $30 in January this year, most of the year its shares hovered around $26, down 30% from their IPO prices.

It was a great success for Facebook,ipo to raise 10 billion dollars in Money. But for the vast majority of investors, Facebook has become one of the most disappointing IPOs in U.S. history.

In the year after the IPO, we didn't see Facebook's own phone, nor did we notice its exploration in E-commerce, or even Facebook's "semantic search", which it did not see as a rival to search giant Google.

But that doesn't mean Facebook isn't making progress. During this period, Facebook broadened its advertising business, and through the latest news feeds, Facebook began advertising for mobile end-users. In addition, Facebook has developed a number of applications specifically for mobile terminals, such as AD promotion for Third-party software.

These measures do work. In the previous quarter, 30% of Facebook's ad revenue came from mobile devices, 23% in the first quarter, and 14% in the previous quarter, and the results of the mobile business layout were obvious. In fact, not only is the mobile business very irksome, this year, Facebook's overall revenue has also been a significant boost.

This year's change: Revenue!

At a working conference last July, Facebook's management, codenamed "M Team", decided to allow more teams to shoulder the revenue burden, given the slump in corporate equities.

At the meeting, Zuckerberg and COO Snow Lie Sandberg (Sheryl Sandberg) and the chief Financial Officer David Ebersmann (David Ebersman) discussed the company's business group issues, and decided to use more product development and team collaboration to get the revenue up.

"Boosting revenue has become a top priority and now is the time," said David Fischer, vice president of Facebook Marketing, David Fischer. "The leadership also needs to shoulder responsibility," Fisher added.

Facebook's core engineers are also being asked to address revenue-related issues at the first time. This February, "M team" member Andrew Bosworth (Andrew Bosworth) was entrusted with the responsibility of Advertising Engineering department to oversee the development and construction of advertising-related products. It is worth mentioning that Andrew Bosworth is the main developer of the news Feed (information flow).

Facebook also asked project managers to study how to develop more lucrative products. Today, advertising salespeople are starting to work closely with product engineers, who are required to visit their customers-advertising publishers-to listen to their customers ' suggestions and requirements.

The corporate culture of "all services for revenue" is forming inside Facebook.

But the increase in revenue has also hurt the user experience – a view that has been recognised by a senior Facebook: "Today, Facebook, which is getting more and more absorbed, is no longer the same Facebook." But on this month's revenue conference call, Mr. Zuckerberg stressed to his investors that Facebook does not have "too much" impact on the user experience. In other words, Zuckerberg admits that more profitable Facebook has more or less affected the user experience.

Still, Facebook's positive attitude to profitability has encouraged many investors. "Given the many promising advertising products and Zuckerberg's confidence in revenue, he will increase his share of Facebook," said Mark Hawtin, the GAM Star Marvell Fund Project investment manager. It is understood that GAM Star Marvell Fund has invested up to 250 million dollars in Facebook.

Mark Hau said: "When Facebook first came out, the message the company gave to investors was that our focus was on how to keep the number of users growing, and that revenue was going to go along with it; but Facebook after the IPO has made investors feel The revenue and mobile sector is also a key part of Facebook's work.

Facebook's shift to revenue began in early 2012, especially after the quarter's quarterly earnings, which made Facebook firm in its determination to reverse profitability.

IPO Market picks up

Many Silicon Valley tech companies have been less enthusiastic about IPOs in the year after their failed IPO, but in recent times the IPO plans of Silicon Valley's big technology companies appear to have been put on top of executives ' agendas.

According to some industry executives and sources, these companies, including social networking Twitter, the US Peer-to-peer network lending Platform lending Club and the Australian software start-up company Atlassian, are already starting to prepare for IPOs, And many other tech companies are interested in IPOs next year or within the next 18 months. Therefore, if any consumer technology companies in the recent burst of the intention to test the IPO market news, careful technology investors should pay enough attention.

In these "quasi-IPO" enterprises, those enterprises as the main customer group software companies, the pace seems to be the fastest. Among them, marketing company Marketo and data analysis software company Tableau Software in Friday on the New York Stock Exchange (NYSE new Exchange) for an initial public offering. New cyber-attack protection firm FireEye and mobile Equipment company Good Marvell are sifting through their underwriting lines and are expected to make an IPO later this year.

In addition, Opower, an energy efficiency firm based in Virginia, and advertising technology companies including Criteo and Yume Inc., are considering plans to implement IPOs within the year. In the consumer product technology company, GoPro, a sports camera maker, is also aiming to make an IPO later this year.

According to Dealogic, the financial data provider, the technology sector IPO market appeared relatively calm in the first quarter of this year, with a total of only 6 IPOs by Internet-related companies, with a sharp drop in comparison with the number of 15 in the same period last year. Some companies have been able to slow their IPOs as private-equity firms have been involved, while others want to make an IPO after making sure valuations go beyond private-equity funding after they are listed.

Of course, some companies are no longer wavering. In addition to the aforementioned Marketo and Tableau Software, this year's March or April should be a "blowout" of the technology enterprise IPO, including advertising tracking company Marin Software and software developer Rally Software Development is an IPO that has been launched during this period.

"The number of private companies in the Silicon Valley that are considered to be ripe for IPOs is at an all-time high, and we are confident that we will usher in a slew of IPOs in the future," said Venky Ganesan, Globespan Capital Partnership venture capitalist Winkles-Ganesan. ”

Influencing factors

In this regard, some bankers and investors believe that "the good trend of the stock market is one of the factors that stimulate IPOs." In addition, many technology companies have developed rapidly in recent years to the size of listed companies, and they want to take full advantage of the IPO.

Meanwhile, the "Entrepreneurial Assistance Act", which was formally enacted last year (Jumpstart our Business startups, "JOBS Act"), provides that companies with annual revenues of not more than 1 billion dollars can keep their IPO documents private, Until these companies began to sell their shares to investors in the roadshow three weeks ago.

Jeff Vetter, a partner at the Fenwick & West law firm, who helped Facebook launch the IPO last year, said: "The implementation of the bill will prompt start-ups that have been wary of the IPO review mechanism to accelerate their IPO process." ”

In fact, the bill is largely proposed and pushed by many Silicon Valley venture capitalists, who think it can reduce the pressure on smaller start-ups that are planned to go public and reverse the decline in IPOs in the U.S. market. Typically, a company has to disclose a range of financial information, corporate strategy, and risks to future development in the months prior to IPO, making investors more likely to value their shares. But at the same time, it will give its rivals more opportunities to pry into their business plans.

"The IPO of technology companies will be very tight this year. "Vettel expects his law firm to undertake a total of 12 IPOs this year (including 3 companies that have already made IPOs), compared with only 6 last year."

Renaud Laplanche, chief executive of Lending Club, said: "The bad IPO performance of Facebook has also helped those companies that want to start IPOs in another way," Laplanzy. Because investors have since greatly reduced their expectations for the corporate IPO. At the same time, Facebook's IPO has brought more rational thinking to the market, because the last thing we want to see is ' a stock rose 200% on the first day of the IPO and then ushered in a long slump '. ”

Laplanzy hopes his lending club in San Francisco will be able to make an IPO sometime next year.

Future expectations

At present, the most externally expected technology companies IPO is not Twitter, the company has valued more than 10 billion U.S. dollars. Sources say the company's executives are now preparing for an IPO and are planning to put it into practice within a year. However, a Twitter spokeswoman declined to comment.

Aaron Levie, a well-known cloud storage service provider, Yaren, says the IPO does help companies have enough capital to carry out acquisitions and provide better services to corporate customers. But he also hinted that box is unlikely to start IPOs in the year, and that the likelihood of an IPO in 2014 is greater.

"The identity of the private sector will make the company more flexible, but public listing is clearly our future choice." "Levy declined to give more information on the company's finances, saying only that" box's annual revenue rose 150% from the previous year.

In addition to box and Twitter, other high-profile tech companies seem to be in no rush to Ipo,box's biggest competitor this year Dropbox is one of them. According to two people familiar with the operation of the company, Dropbox currently has no plans to carry out the IPO. It should be noted that in 2011 Dropbox successfully raised $250 million trillion in a round of financing led by the venture capital company Index Ventures, which was valued at around $4 billion trillion, and the company is still in a profitable state.

Dropbox declined to respond to this.