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Facebook Goes Public – Nine Things You Should Know About Facebook’s IPO

Facebook could be worth nearly $140 billion by today’s market close

The social network priced its shares at $38 apiece, valuing the company at $104 billion. The average first-day “pop” for a technology company is 32 percent; if Facebook follows that trend, it’ll be worth $137 billion by day’s end. But there’s little about Facebook that’s average, including its public offering. This is the technology’s biggest initial public offering and history’s second-biggest IPO, period, and it will raise about $16 billion. Statistics suggests that the first-day pop—if there is one—will be more modest than average.

A lot of the smart money is getting out

Early investors such as the venture capital firm Accel Partners are selling an unusually high number of shares.Nearly 60 percent of the stock sold today comes from insiders, compared to 37 percent for Google (GOOG) when it went public in 2004. Goldman Sachs (GS) is selling about half its stake, far more than the firm initially planned. “If you really thought that 12 months later the stock would be 50 percent higher, you wouldn’t leave that on the table,” Erik Gordon, a professor at the Ross School of Business at the University of Michigan, told Bloomberg News.

To justify its valuation, Facebook will need to annoy its users …

Thanks in large part to General Motors’s (GM)decision to de-friend Facebook, there are a lot of questions about the efficacy and future of Facebook’s ad-dominant revenue model. And it has high expectations to live up to: The $38 price gives Facebook a whopping 107 price-to-earnings ratio. (For comparison, Apple’s (AAPL) is around 13.) To dramatically boost ad revenues, the two best options are either to put more ads on the site—which would annoy users—or find more places to put ads. The latter means creating a network of ad inventory across the Web, much the way Google’s Doubleclick sells ads and places them on sites like that of the New York Times (NYT). This would give Facebook far greater reach, but could also give users the creeps. Imagine updating your Facebook status (“Really loving that new Carly Rae Jepsen song!”) and then seeing ads to buy the track Call Me Maybe at every site you visit.

… or do something besides advertising

Currently Facebook’s only source of non-ad revenue is its digital currency, Facebook Credits, which people use to buy virtual goods, such as tractors in FarmVille (ZNGA). During the first quarter of 2012, payments grew to make up almost 18 percent of Facebook’s revenue—close to $200 million in total. Overall, though, fewer than 2 percent of Facebook’s users have bought virtual goods with their payments option. There’s a lot of potential growth, in other words, along with hints that a big online operator such as Spotify may begin accepting Facebook Credits in the future.

Facebook has plenty of revenue options beyond payments and advertising

Facebook is a force: It accounts for 9 percent of all online visits in the U.S., according to Experian Hitwise, a company that measures website traffic. Hitwise also says that Americans spend an average of 20 minutes per Facebook visit. Worldwide, nearly 1 billion people have a Facebook profile. As investor Chris Dixon puts it, Facebook has real assets—including “a vast number of extremely engaged users, its social graph, Facebook Connect”—and should be able “to monetize through another business model,” apart from advertising. It could create the Social Smartphone, sell data analytics products, charge for higher-res photo and video storage, or perhaps hawk vintage Mark Zuckerberg hoodies.

There’s already a “Facebook Mafia”

Heard of the PayPal Mafia? Former executives from the online-payment provider have gone on to start big-time tech firms, such as LinkedIn (LNKD), Yammer, and Yelp (YELP). (And one member, Peter Thiel, cut the first big check for Facebook.) A Facebook Mafia has already emerged, and members have founded Asana, Path, andQuora. The Facebook Mafia is real, even though the name could use some work, says Dave Morin, Path’s chief executive officer, who previously developed Facebook’s development platform. “I guess we can’t escape from calling it that,” he says.

Facebook goes where Google won’t in photos

Facebook owns one of the largest photo repositories in the world, and its facial-recognition technology is getting a workout scanning them all, with more than 300 million photos uploaded per day. Facebook stores 60 billion images, a whopping 1.5 petabytes of data. For each uploaded photo, Facebook stores four images of different sizes. The site shows as many as 550,000 images per second. This is an area that has upset privacy critics and represents something that Facebook is willing to do that even Google isn’t: Google’s Eric Schmidt said last yearthat the company had built an app that would let people snap photos of others and identify who they are but decided not to release it, due to privacy concerns. Google and Facebook both have sophisticated facial-recognition technology, but Google requires users to opt into its photo-tagging service. Facebook users are included automatically.

Facebook’s new campus could be cursed

Late last year the social network moved into a 57-acre site in Menlo Park that was previously inhabited by Sun Microsystems. Sun’s fortunes soured shortly after the computer company took up residence there. The same thing has happened, in different times and places, to software-maker Borland, Silicon Graphics, and even Apple (which nearly went bankrupt three years after it moved into its current Cupertino, Calif., headquarters at 1 Infinite Loop). The good news: Companies that move into pre-existing campuses seem to fare better. Google, for instance, took up residence in SGI’s old digs.

Up north, Facebook is the only thing better than hockey

Facebook is one of the top two websites in every country except China. The social-networking site is most loved in Canada, where it wins 12 percent of all online visits.

Source: Businessweek.com

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Networking Tips: How to Work a Room

Networking can serve as a valuable strategy for getting a lead on a job, gathering information, or catching the special attention of a company recruiter.

Most of us are not born minglers. Practice and preparation will help you develop the skills it takes to be effective at an Employer Info Session, a Career Fair, or other serendipitous opportunities. As difficult or awkward as it may feel at first, the ability to meet and make a positive, professional impression on people will become ever more important as your career advances and develops. Here are some tips to get you started.

Check your attitude

Many of us are shy or reluctant to approach strangers in new social situations, so understandably it’s not always easy to muster the energy to try and connect with people at networking events. That’s why it’s key to get mentally geared up before you even show up. Because your attitude often guides your behavior, you must overcome any negative self-talk that could hinder you from reaching out to others. Do these outlooks sound familiar?

  • “Why should I bother trying to impress this person? I’m only one of a hundred students this recruiter is going to see today.”
  • “I don’t think I know enough to engage the company reps in an intelligent conversation.”
  • “I’ve never really been good at meeting people. That’s just my personality.”

Such negative thoughts prevent you from pushing past any social roadblocks standing in your way. The truth is that many, if not most, people have similar thoughts in group situations and are just as hesitant to initiate conversations. But if you change your attitude from negative to positive, you can instead take the lead. Remember:

  • People enjoy talking about themselves. Ask them questions to get them started.
  • People feel flattered when you show an interest in them and their work/organization. And they will reciprocate your demonstrations of sincere interest.
  • You have more to offer others than you might think; just believe it.

Redefine what it means to interact with “strangers”

When you join a new student organization or club, you share certain interests with the members. When you go to a party, you run into people you’ve seen in class or around your dorm. A networking event is not really all that different if you view it as an occasion to find what you have in common with other people there. Commonalities help “strangers” connect more easily.

  • Take the initiative to approach others, introduce yourself, and share a piece of information that could reveal the common thread you share with them.
  • During conversations, listen carefully to discover shared interests or goals.
  • Use your shared background or interests as the basis for sustaining conversations.

Prepare and practice your self-introduction

To avoid being tongue-tied when you try to start a conversation with someone you don’t know, prepare a self-introduction that is clear, interesting, and well delivered. What you say about yourself will depend on the nature of the event, but in any case, it shouldn’t take longer than 8-10 seconds. Although practicing your introduction might at first seem silly and artificial, it will eventually help you make an introduction that sounds natural, confident, and smooth. Here are a few examples:

  • “Hi, my name is Catherine Lee. I’m glad to have this chance to meet you and learn how a psychology major can break into the pharmaceutical industry.” [Employer Information Session]
  • “Good morning, I’m Bryan Sampson, a former summer intern at your Los Angeles branch.” [Career Fair]
  • “Hello, my name is Jessica Garcia. I’m a junior rhetoric major looking to find out what it’s like working in public relations and marketing.” [Career Speed Dating Event]

Risk rejection – it’s not the end of the world

It happens. Some individuals may not respond to your introduction in the way you would like. If that takes place, don’t take it personally and just move on. As long as you maintain an outgoing and friendly attitude, you can plan for continued networking success by:

  • Identifying the goals you want to achieve at the networking event before you go (e.g., to learn more about a career, to develop internship leads, etc.)
  • Keeping a healthy sense of humor.
  • Treating everyone as you would want to be treated. Aside from being the courteous thing to do, you don’t know who might be helpful to you in the future.

And last, but not least, don’t forget how important it is for you to physically move around and about when you’re at a networking event. You can’t work a room when you’re sitting down! So get in there and show them what you’ve got.

Source: Career.berkeley.edu

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