So, history will be created in the Global stocks markets tomorrow.
facebook will list, and my personal belief is that it will be valued at somewhere between the 122-127 Billion US$ valuation.
Public and expert opinions are split on this historic IPO. Some people like Steve Wozniak - the Apple Co-Founder, think that facebook at any price is worth it! Others (the usual stuffy Wall Street bankers) think that it's too expensive.
This is my take on the facebook IPO:
F = Future
In 1993, on a Sunday afternoon, a gentleman called Manish Chokhani of Enam Securities told me about a software Company called 'Infosys' that Enam securities was planning to underwrite and hand hold to IPO.
Manish told me, "Alok, if this Company does well, it will be a nice stock to own."
Funnily, the Infosys IPO devolved (was not fully subscribed) and Enam being the merchant bankers to the Company, were forced to own a lot more shares than they had to!
The rest is history.
I think the facebook IPO is the window to jump into the future.
Just look back and think objectively - has any Company that you know done so much, so well and so fast in such little time?
To me, the facebook IPO is like the IPO of Infosys, Google, Apple etc.
A = Advertising
So, GM is pissed off that facebook does not work.
Do people even want to buy GM cars?
It's beyond a silly GM to understand that facebook is not TV or Radio or a Hoarding or a Yahoo. It's not a Google. It's facebook!
Advertisers will have to invest time and money and figure out how to make people notice them.
When television started, advertisers of print media laughed at the format. Check out how that industry has changed. Simply because the ad format needed an invention. The stupid print ad became a 30 second Television Commercial.
Smart ad agencies will create smart advertising for smart clients on a media platform where 900 million people collide each month!
The facebook IPO gives the world a chance to buy into the future of advertising.
C = Country
facebook has 900 million registered users.
I'm guessing a good 400 million log into the site each month, at least once.
Now, how and where can you buy a Country that is the third largest in the world, after China and India?
Is 100+ Billion dollars of any significance when you look at facebook from this perspective?
No one ever in the history of mankind has assimilated so many people, so harmoniously in one place and made them stay there.
This is a unique opportunity that the facebook IPO offers!
E = Economics
Are you worth 100 US$ as an individual?
I'm sure you would say, "Hey! I'm worth millions!!"
Now, extrapolate that number:
If you just consider that Facebook has 900 million people, each worth just 100 US$, that's an enterprise value of 90 Billion US$!
It's not a staggering amount of money individually, but put together, it justifies a valuation of facebook at 125-135 Billion US$!
P.S. - I believe that anyone in the world who can access facebook via a mobile or PC has an 'economic value' far higher than 100 US$ per head.
And facebook will find a way to exploit and improve that 100 US$ figure.
B = Business
Now consider the potential of 'Business' on facebook.
I see a Linkedin, a Google, a Yahoo, an ebay, etc etc - all being sub sets of facebook.
Just because facebook does not offer you 'search' today does not mean that it never will! It has the ability to smash Google at its own game.
Imagine a facebook 'listings' that allows you to list and buy what you are looking for?
Similarly recruitment. There are recruiters who are going to employ people on the basis of their 'sociality' (how they behave, what they say, how they contribute) and facebook offers the best hunting ground to them!
The age of the 'monologue resume' is over. The age of the 'interactive social resume' has arrived.
If you add up the various businesses that facebook actually combines, you will be surprised to find that the facebook IPO looks like cheap change.
O = Offensive!
Didn't get the point?
Well, ask the communists in China what they think about facebook!
They HATE it.
And that is why they shut it down. That is why facebook is not allowed to operate in China.
Is it because it has offensive content?
Well, quite the contrary!
facebook is offensive to oppression, to coups, to dictators, to mad politicians who don't allow the ordinary citizen to speak and express her mind!
Imagine what would happen if all the micro-bloggers, poets, writers and photographers of China were actually allowed to post their content on facebook - for the world to see?!
China would collapse.
P.S. - Twitter, in my humble opinion, brought Egypt and Libya down.
I say facebook is valuable for a trillion dollars only because it holds the power to stop global political anarchy and oppression.
O = Opportunities
Just look at the eco-system facebook offers.
I say it's the world's largest opportunities marketplace.
You can start a games Company and list for billions just running off facebook (Zynga).
You can start small stores and mini businesses (like a friend Avantika Kapur does here - http://facebook.com/TheLavenderCloset)
Now, look 'outside' of facebook.
Zillions of sites use facebook 'plugin's' like its commenting box API to enhance engagement on their sites.
facebook makes things get noticed. It may be a new book, a new travel destination - hey a new restaurant!
facebook also offers the ability for 'social media personalities' to create personas for themselves and influence and enthrall audiences.
I say that the next Oprah Winfrey will be a facebook celebrity - not someone on TV.
Think of facebook credits! It's a global currency!
I believe that the scope, size and dimension of facebook is still not understood because we look at it as a 'social network' for friends.
Once we understand that it's the place that the world hangs out on, the opportunities such a proposition offers, will loom very large!
K = Knowledge
In the next twenty years, I think facebook will be the ultimate and most important storehouse of knowledge.
That's because each of us in some way or the other keeps adding valuable insights, opinions, facts and observations to the facebook repository every hour.
Do you want to see what Monasteries in Ladakh look like?
Sure - try finding out on Google search.
You'll find splendid images of Monasteries in the Ladakh region. Now, what use are these images to you if you were planning a trip? Do you want to know if these Monasteries have sleeping facilities? Restaurants? Toilets?
On facebook, there will be logs, photos, experiences and live people who will have 'been there, done that' long before you began any of your contemplations. Finding them on facebook and sending them a polite message with a question will give you knowledge that will not be available anywhere.
The facebook IPO brings the world's largest repository of knowledge into your hands!!
The facebook IPO has many different hues and colours than you think.
It's a phenomena, not just another 'Initial Public Offer'.
Alok blogs at http://therodinhoods.com/