{"id":231447,"date":"2010-01-26T12:16:00","date_gmt":"2010-01-26T17:16:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/imaginary-mark-zuckerberg-tells-us-why-facebook-wont-ipo-this-year-2010-1"},"modified":"2010-01-26T12:16:00","modified_gmt":"2010-01-26T17:16:00","slug":"imaginary-mark-zuckerberg-tells-us-why-facebook-wont-ipo-this-year","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/231447","title":{"rendered":"(Imaginary) Mark Zuckerberg Tells Us Why Facebook Won’t IPO This Year"},"content":{"rendered":"

\"Facebook<\/p>\n

This morning, Facebook investors Yuri Milner of Russian holding company DST and Jim Breyer of Accell put the squash<\/a> on hopes for a Facebook IPO in 2010.<\/p>\n

It’s pretty disappointing news for all of us industry watchers hoping for another IPO bonanza.<\/p>\n

Obviously the best person to take our complaints to would be Facebook cofounder and CEO Mark Zuckerberg.<\/p>\n

Who better to explain why its best for Facebook to stay off the go-go public markets?<\/p>\n

But of course Mark can’t and won’t talk about this type of thing.<\/p>\n

So here’s do the next best thing: a Q&A with an Imaginary Mark Zuckerberg. We think you’ll find him startlingly candid.<\/p>\n

Silicon Alley Insider<\/strong>: So Mark, Facebook revenues just hit a $1 billion annualized run rate<\/a> and Proctor & Gamble is buliding an office in Silicon Valley<\/a> just so they can buy ads from you guys. What could you possibly be waiting for?<\/p>\n

Imaginary Mark Zuckerberg:<\/strong> Well, it’s true that we turned cash-flow positive last year<\/a>, beating even our own (publicly managed<\/a>) expectations for revenues. But let’s be honest: at this point, the suddenly respectable revenue figures have less to do with us “figuring out” brand advertising on the Web and more to do with our MASSIVE scale.<\/p>\n

(You know we’re only being careful when we say we have 350 million monthly active users, right? Your grandma uses Facebook. She was user number 567,382,134, OK?)<\/p>\n

SAI<\/strong>: Wait, I thought the secret to Facebook brand ads is that they drive users to Facebook “fan” pages, where brands can spam users who agree to become “fans.”<\/p>\n

IMZ<\/strong>: Yep. And its not just those users brands can “message.” (Spam is such an ugly word.) Getting into that user’s news feed, they get to spam all their friends too!<\/p>\n

But frankly, we have no idea how to quantify how much a “fan” is worth, yet. We might need to poach a few more Googlers first<\/a>. (Nice “air quotes,” by the way.)<\/p>\n

SAI<\/strong>: OK, but what about the $1.6 billion virtual goods business — Zynga and all that? Aren’t you guys are setting up a “Pay With Facebook” payments system that will take a 30% cut from all virtual good sales on Facebook? Didn’t I read some report that said you guys think it’ll double your revenues?<\/a><\/p>\n

IMZ:<\/strong> Woah woah woah woah. Calm down. Yes we’ve been ogling Zynga’s $250 million revenues for some time now (also a laughably low estimate, by the way). Yes we’re trying out “Pay With Facebook” so we can get a 30% cut of it. Yes we expect the business to be huge. No we don’t want you telling people that.<\/p>\n

Remember how when we launched Beacon I said Facebook would change media for the next 100 years<\/a>, and then we ruined everyone’s Christmas<\/a>? [Facebook COO] Sheryl [Sandberg] will have me waterboarded if I set expectations that high again.<\/p>\n

Tell readers virtual goods are a “bubble.” That always works.<\/p>\n

SAI<\/strong>: So we get that you don’t want to go public because you don’t want to answer to public shareholders — but what about your employees. They get paid in equity. Don’t they want an exit?<\/p>\n

IMZ<\/strong>: You kidding me? DST bought everybody’s stock last Fall!<\/a> Employees aren’t rich yet, but they’re set for the next five years or so.<\/p>\n

By the way, who told you I don’t like answering to anybody? That’s just not true. Ask any of my cofounders. (There aren’t any around the office anymore, but I’m sure you can find one if you Google hard enough.)<\/p>\n

SAI<\/strong>: So the Russians own all the stock — surely they want an exit at some point, right?<\/p>\n

IMZ<\/strong>: Sure, but “at some point” is still a ways off for these guys. They are putting no pressure on us at all. And why would they?<\/p>\n

Think about it: if we IPO’d then ANYBODY could buy Facebook stock. Right now shareholders looking for cash can either go to the Russians or some weird Web site<\/a>. The harder it is for anybody else to buy stock, the cheaper it is for the Russians to gobble it all up at a laughably low valuation ($10 billion? Hah!)<\/p>\n

Join the conversation about this story »<\/a><\/p>\n

See Also:<\/b><\/p>\n