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                                                          What should you know about                                             acebook?
                                                           Written by: James DiCenzo

photo provided with permission by: Renjith Krishnan
Since the SEC filing regarding Facebook’s upcoming initial public offering (IPO), the calls have started to trickle in...

“I want some shares in Facebook! How                       you’re already an active member on                         Once termed a small niche market, social
can I get them?”                                           Facebook, chances are it already knows                     gaming has exploded with the advent of
“When will it start trading? How high                      what kind of music you prefer, what                        the Smartphone and tablet. So much so,
will it go?”                                               kind of car you drive, and where you                       game creators like Zynga have already
                                                           like to vacation. But these powers are                     blossomed into multi-billion companies
As one market pundit remarked,                             not what Facebook does best. If you                        with the help of Facebook’s marketing
Facebook is about to become the “larg-                     like to travel, Facebook can provide you                   capabilities. But Mr. Zuckerberg has
est casino chip on Wall Street.” Reports                   with exceptional insight into places you                   made it clear, his company does not
are already indicating Facebook’s IPO                      might like to go. Or perhaps provide                       build services to make money, it makes
may already be valued at three times or                    tips on the next type of car you should                    money to “build better services.” For
more that of the prior record holder in                    buy. Or which one of your wedding                          this reason, well above others, Facebook
the tech industry, Google. In August                       photos makes you and your spouse look                      could potentially soar beyond Google’s
2004, Google was perceived as being                        the best. Sure you could track down                        success. After all, like Charlton Hes-
richly over-valued, coming to the Street                   other places online, but on Facebook                       ton discovered about Soylent Green,
with a value just north of $27B for their                  you don’t have to look far, because it                     ‘it’s made from people.’ With over
internet search portal. Since that time,                   already completely surrounds you, like                     100 billion ‘friend’ connections already
with Google hoisting its valuation as                      Colonel Custer near the Little Big Horn                    made, Mr. Zuckerberg may have already
high as $190B, Facebook investors                          River. Facebook’s greatest strength                        created something far beyond anyone’s
(current and future) have dollar signs in                  is nothing more than precise target                        expectations.
their eyes. Is it fair for Facebook to be                  marketing and according to the latest                      When it starts trading in a few months,
worth this much? Does it make sense                        filing, advertisers are lining up to get                   will it meet or exceed our expectations?
for something that you cannot hold or                      in the game. The filing reveals that                       I am certain several hundred thousand
touch to be worth more than Research                       Facebook’s registered users now exceed                     Facebook users will be itching to click
in Motion, BCE and the Bank of Montreal                    845M monthly active users, and makes                       their ‘like’ button, waiting to find out.
combined? For creating nothing more                        a mere $4.39 off each one. While one
than an online social network centre for                   might expect more per user, advertisers
people aged 0 to 100?                                      have been marching en masse to enlist
With the help of Wall Street, the answer                   in the social network’s soaring ranks.
is now unequivocally ‘yes.’                                As well, their network algorithms are                                    James DiCenzo, Hon B.A
As I discovered too, Facebook seems to                     constantly being updated to improve or
do many things better than anyone or                       uncover exactly what kind of informa-                                       Investment Advisor
anything else. And in many cases, is                       tion users would prefer to see, helping                                           www.BBSL.ca
now proving to do them even better. If                     to increase their advertiser’s success.                                           905.528.6505

http://www.ritholtz.com/blog/2012/02/an-open-letter-to-mark-zuckerberg-about-why-it-doesn%e2%80%99t-matter-where-you-list-your-stock/
http://www.nytimes.com/interactive/2012/02/02/business/dealbook/from-netscape-to-facebook.html
http://www.nytimes.com/interactive/2012/02/02/business/dealbook/from-netscape-to-facebook.html
http://www.theglobeandmail.com/report-on-business/rob-magazine/top-1000/2011-rankings-of-canadas-top-1000-public-companies-by-profit/article2071184/
http://www.newyorker.com/online/blogs/newsdesk/2012/02/what-facebook-can-sell.html
http://www.newyorker.com/online/blogs/newsdesk/2012/02/what-facebook-can-sell.html
http://www.newyorker.com/online/blogs/newsdesk/2012/02/what-facebook-can-sell.html
http://www.slate.com/articles/technology/technology/2012/02/facebook_ipo_is_the_social_networking_behemoth_really_a_good_business_.single.html

				
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