Influx of cash could deliver more users, a move into China, new tech
Computerworld - With the Facebook initial public offering (IPO) now official, industry and financial analysts say that a huge influx of cash could enable the social networking company to topple Google from its dominant position in the online world.
Source: Facebook IPO filing. (Infographic: Sharon Machlis)
With an expected valuation of $100 billion, financial analysts say the IPO is worth about $5 billion. That's a big potential war chest for a company that has been fighting for social networking users and advertising dollars with the largest Internet company on Earth - Google.
Given the popularity of its search engine, along with services and products like Google Maps, Android and Chrome, Google obviously is no slouch: It has 32,000 employees around the world and $37.86 billion in annual revenue. That's $1.166 million per employee in revenue.
"Facebook has 800 million users," noted Dan Olds, an analyst with The Gabriel Consulting Group. "How many companies have 800 million anything? The thing that's interesting is that Facebook is profitable and solidly profitable. And an IPO is a huge step for any company, but it's the validation for Facebook, their business and their social networking model."
Facebook and Google are increasingly in each other's wheel house.
Just this past year, Google launched Google+, its own social network and a new direct competitor to Facebook. (Just last week it made Google+ more available to teens, another move to broaden its appeal.) And Google CEO Larry Page has said he plans to integrate Google+ social features into the company's wide range of services and products.
With a lot of new cash, Facebook could make a lot of moves. Olds wonders whether Facebook would try to buy Yahoo, which has been struggling, or even Twitter.
And both Olds and Scott Sweet, a senior managing partner with IPO Boutique, said Facebook could use the money to hire more employees and acquire other Internet companies. Theey also pointed out that Facebook could use the cash to find partners and set up operations in China, which could dramatically increase an already immense user base.
It would take some time -- and Facebook would have to successfully pull off some big moves -- but it could one day dominate Google, according to Sweet. "I do believe that anything is possible with Facebook," he added.
Unseating Google would be no easy feat, though.
First off, according to Olds, the companies are not substitutes for each other. Google is the basis for most searches. Facebook is the basis for most social connections.
And while a profitable IPO would make Facebook stronger, Google is still substantially larger.
"It gives Facebook a ... war chest," said Olds. "Google, though, has $45 billion in cash and short-term investments. That's a really big war chest. Even with this influx of cash, Facebook still can't play in Google's league in terms of cash."
Mark Siegel, a managing director with Menlo Ventures LLC, said Google came along to surpass Microsoft as the biggest tech company. And now Facebook is poised to take the lead from Google.
"Facebook is potentially the platform company for the next 10 years," said Siegel. "I absolutely think this is a scary event for Google. Will it make [Facebook] dominant over Google? Well, Facebook already does dominate Google in terms of social networking. This will enable Facebook to compete with Google in a lot of areas."
Could Facebook push past Google?
"Well, this certainly enables Facebook to move in that direction," said Siegel.
At the top of your Facebook profile, you'll see the five most recent pictures containing a picture of you. You can use this section of your profile to make a more unique and original profile picture by extending the main profile picture into these recent pictures. As can be seen in the picture to the right, this profile takes a larger image and spreads it from the profile picture into the recent pictures across the top.
When using this technique any time you or a friend tags you in a photo it will be posted in the top section of your profile ruining this effect. To keep this effect, hide any new photo by clicking the x that appears when hovering the mouse in the top right-corner of the picture
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