Most of us won’t probably ever understand the magnitude of last Friday Facebook’s IPO. It is also probably you do not care (unless you are an investor) so it is more than enough for you to know that shares did not go up as well as they expected. What is important to you is the way this day, Friday 18th May, will affect to your fanpage, personal page or your advertising on Facebook.
Facebook’s stock closed last Friday gaining 23 cents per share, which is much less than what investors were expecting. But apart from the success (or failure) of the IPO, lots of people are now very rich (some of them even becoming billionaires)
Among the lucky people is, for example, Bono (U2 singer), who bought 1,5% of the company back in 2010 via Elevation Partners (an American equity firm that invests in Facebook). Lady Gaga also got her part of Facebook’s profits. Mark Zuckerberg, on the other hand, got the position 29th in the list of the richest persons in the World, after gaining more than $20K million. El País, Spanish newspaper, has published an infographic with the fortunes emerged from Facebook’s IPO. Social With It has translated it into English for you.
And now, what? What will happen tomorrow? How will this IPO affect us as users? To get an answer, we need to start at the beginning of everything: Facebook went public with just one goal: gaining money, a lot of money. To get it they will have to make their shares’ value grow and grow. How? Increasing the profits.
We’ll see more adverts, but advertising prices won’t go up
Facebook gets 80% of its revenue from advertising. According to Financial Post, if the price of every ad space was to drop by under 1%, Facebook would lose $9 million. That is why it has to find new income sources, new ways to deal and make business with no consequences for user’s pockets. This is actually the aim of the new promoted posts, a new Facebook advertising feature, currently in a beta phase. It could be out for everyone shortly.
Other change could be the addition of advertising in Facebook for mobiles, which is the next logical step if we take into account the communal growth of the use of mobiles for social networking.
We’ll have more online games and applications
Facebook gets the remaining 20% of its revenue from deals with game and applications developers. For instance, if Zynga (Farmville developer) was to end the contract with Facebook, it would lose around $370 million.
What’s the solution? More deals with different developers in order to reduce the risk.
Advertising will be key (and essential) to engage fans
With the focus on advertising, Facebook will concentrate on all fanpages to get its advertising ways. It doesn’t mean you will have to pay for your fanpage or anything like that. The idea could go on a different direction: the more you invest on ads, the more engagement you’ll have.
More deals with technological companies
Fanpages could get benefits from the higher investment on new and better applications or features that will help you out to lead your social media campaign to the right end, via the correct way.
It is possible that we’ll soon see the first consequences of the Instagram acquisition.
Fewer (and not very frequent) changes
The fact that Facebook is now a public company will clearly influence the frequency of changes. They’ll be less inclined to change its products as quickly as they did in the past. Users will be able to get used to every change before the next one comes.
As a result, Facebook’s IPO will positively affect users in my opinion. The company will be under pressure from investors to grow as quick as possible, and it seems Mark Zuckerberg plans to keep taking into account the user’s well-being. Will we see more ads both on laptop and mobile? Yes, it is quite possible. Will features and applications be improved for users? They will be, indeed.
Now, your turn! What are your thoughts on this? Do you think there will be more changes apart from these ones? Any questions? Give us your vision either below on comments or on Facebook fanpage. Your opinion really matters to us!!!