Skip Links

What Facebook's IPO means for users

Facebook has filed to become a public company, raising questions about how that may affect its services and culture

By Cameron Scott, IDG News Service
February 01, 2012 06:35 PM ET

IDG News Service - Facebook's decision to become a public company is seen as a bellwether for Web 2.0 stock offerings, but what will it mean for the social networking giant's 800 million users, and for the companies that build third-party apps for the site?

LOOK BACK: Top 25 network and IT industry news stories of 2011

SLIDESHOW: Facebook IPO: The heftiest payday

Facebook filed for its initial public offering (IPO) Wednesday afternoon, a move expected to raise it between US$5 billion and $10 billion. But it also means Facebook will come under greater public scrutiny, and it's likely to face intense pressure from investors to keep growing its business each quarter.

Industry analysts point to a few key areas where Facebook will seek to expand, through either in-house development or acquisitions. The changes could appear in what users are able to do on its site, and in how Facebook uses their data to make money.

Facebook will almost certainly improve the mobile experience for users. It has been explicit about its intention to "invest in new technologies so you have a great Facebook experience no matter where you go," as one company blog post put it.

Users can expect to see changes in the mobile experience sooner rather than later, said Brian Blau, a technology analyst at Gartner. "Facebook right now is a company that really has two experiences: desktop and mobile. Those experiences just in the past couple of months have started to look similar. You can see the direction Facebook is going."

The money raised through the IPO will also empower Facebook to mount a more serious challenge to its wealthy competitor, Google. Facebook could look to improve its search function in particular.

Patrick Moorhead, the founder of Moor Insights & Strategy and a former executive at AltaVista, put it this way: "If Facebook had one of the better searches, why would you have to leave Facebook?"

The company already gets one in four page views on the Web, but it garners just 10 percent of Internet ad revenue, said David Greenbaum, the CEO of BoostCTR, a marketing firm that specializes in search and social media platforms.

A better search function could help increase its share of advertising dollars. Greg Sterling, of Sterling Market Intelligence, said the utilitarian nature of search platforms helps account for the greater success of their advertisements.

"Facebook is a great communication tool," he said, "but in some ways it's not useful like search." When users go to a search site, he said, "they have tasks and they accomplish them. They're making reservations; they're buying things."

Facebook will almost certainly continue to make itself a friendlier ecosystem for third-party apps, several industry analysts said. In August, the company earned the dubious honor of "worst API" in a developer survey conducted by Trove, a photo aggregation service. In September, Facebook started pushing its new open-graph API (application programming interface), linked to its new Timeline feature. For users, that could mean a spate of new apps, for desktop and especially for mobile.

Our Commenting Policies
Latest News
rssRss Feed
View more Latest News