Facebook announced last week that it will go public and will be traded openly on the stock market. This is a momentous occasion for the company, as it will finally become a public corporation. Users of Facebook should be thrilled about this, as it will keep the company accountable and innovative, allow for more user input, and not to mention Zuckerburg will make a nice bundle of cash.
One of the major bonuses of this decision is that it will hold Facebook as a company accountable to public disclosure of major business moves.
This is because there are countless regulations governing what a publicly traded company can and cannot do, and publicizing company financial performance is a major one. Moreover, the stock price will reflect public opinions about the company’s practices, bringing another level of Facebook’s performance into the public eye.
This accountability will prompt the company to focus on user engagement, which inevitably will take some power out of Mark Zuckerberg’s hands by forcing the company to respond to new user feedback.
Amidst this new emphasis on user engagement, Facebook will also be required to respond and engage another important group of people: shareholders.
Shareholders of a company are entitled to have an impact on the decisions of that company; they may vote for various positions and also aid in determining what the corporations activity will look like in the future.
Further, if there is user discontent that Facebook is ignoring, the shareholders will likely voice concern, creating another means of accountability for the company. Ultimately, this will give users of Facebook a chance to have a democratic, albeit limited, impact on the website.
Finally, it is possible to make a large amount of money from the IPO. The company made a massive profit in the last year, and it will likely continue.
The business model is incredibly sound, as it profits off of one of the most essential human needs: societal interaction. If you buy into the stock, it is likely that you can make some money as long as you sell quickly afterward.
Facebook’s IPO is a positive occurrence. It will force the company to be accountable in many new areas that it was not before, while also allowing users to have an impact and make some money off of the deal.
