Facebook IPO Article Example | Topics and Well Written Essays - 1000 words

Facebook IPO - Article Example This will make Facebook the world’s leading social network by capitalization considering that its value will stand at $104 billion at the share offering. The social network is on course to raise $16 billion through its initial public offer. The company will certainly rank among major share offering in the United States taking into consideration that Facebook stands third behind Visa and General Motors. The IPO has undoubtedly portrayed a profound revolution and growth of the company, which was formed eight years ago in Harvard as a dormitory project. The social network will be issuing 420 million common stock shares of which Facebook will sell 180 million of its share while an additional of 241 million shares will come from previous shareholders. After the initial public offer Facebook will be ranked among the most valuable US technology corporations, where key players such as Amazon, Google, Cisco and Apple owns the majority stake in the industry. Background Facebook is the w idely known and used social network. Facebook first entry was in 2004 and had accumulated over one million users within one year. Statistics shows that the number was around 100 million users in December 2008 and 200 million in June 2009, which is doubling of the figure in six months period. Currently, this social network is globally recognized and available in 4 languages (English, French, Spanish and German) and sources say it is spreading its wings to include 22 more languages (Weir, 2008). Facebook is preferred for its user-friendly applications, such as Facebook Online Chat, launched in 2008 and this feature is a popular real time messaging market applications. Facebook is a global with hundreds of millions people using it to inter-connect and check in on friends/relatives, upload photos, share videos and links, meet new friends and have updates of how their friends are fairing (Facebook, 2010). Market Competition According to Nick Wingfield, author of the article, Apple vs Fac ebook, these two companies are not big rivals or competitors. According to the author the companies’ relations is comparative to the relationship between United States and China. These companies have immense powers in their own right. They are neither friends, nor hostile to each other. The apparent reason why Apple and Facebook are not rivals is because Facebook don’t develop operating system, computers, mobiles and tablets. Implications for Competition (Rivalry among the Companies) Apple’s social network, Ping, is not such popular apart from its users who have musical preferences on iTunes. It is obvious that its creation was not meant to challenge Facebook. Apple’s late CEO, Steven P. Jobs, professed that he admired the Facebook CEO and co-founder Mr. Mark Zuckerberg. He hailed praises to Mr. Zuckerberg for his role of trying to build a lasting Silicon Valley company and not selling it. Recently, tension has been realized between the two companies. Aft er Ping introduction to the market two years ago, the two companies could not agree on how to integrate Facebook with the Ping services. This would have enabled users to use Ping to interact with their Facebook friends. Mr. Jobs told one of the reporters that Apple could not work with Facebook on the Ping issue as Facebook was demanding difficult terms they could not agree on. Strategic Alliances Facebook launched alliances in the summer of 2008, with Netflix and Apple to promote Facebook Connect. With regards to Apple, the platform allowed Apple to use Facebook Connect to promote its products. Netflix members were able to link their Facebook and netflix accounts through the Facebook Connect. This helped to expand communication by making it possible for Netflix users to