Facebook targets $10 bln IPO in Q2 next year

English.news.cn 2011-11-29 11:24:43

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BEIJING, Nov. 29 (Xinhuanet) -- U.S. social networking goliath Facebook is considering a 10-billion U.S. dollar initial public offering in the second quarter next year, according to media report Tuesday.

That will value the company at more than 100 billion dollars, according to people familiar with the matter.

The company has been reluctant to do an IPO but now internal discussions over the timing has warmed up, insiders said.

Facebook Chief Financial Officer David Ebersman has been leading the company's talks with Silicon Valley bankers about an IPO, said people familiar with the matter.

It is targeting a time frame of April to June 2012 for the IPO, according to media reports. Investors have been eagerly awaiting a chance to buy into the fast-growing company.

The company has been hotly anticipated for several years, and viewed as a defining moment for the latest Web investing boom.

================As Facebook grows up, it courts Madison AvenueSun, Feb 05 20:19 PM ESTBy Peter Lauria(Reuters) - About a year ago, when it became clear that taking Facebook Inc public was a matter of when not if, Chief Operating Officer Sheryl Sandberg went out and poached Caroline Everson, then global advertising head at Microsoft Corp. poach1 (pōch) tr.v., poached, poach·ing, poach·es.To cook in a boiling or simmering liquid: Poach the fish in wine.Landing an executive with Everson's pedigree was a coup - prior to Microsoft, she was a top advertising executive at Viacom Inc's MTV Networks and at Walt Disney Co. The hire also sent a clear message to Madison Avenue from the world's largest online social network: We want to work with you.Until Everson's arrival as vice president of global marketing, Facebook's relationship with the advertising community was at best politely dismissive, at worst outright antagonistic.

Chief Executive Mark Zuckerberg has said he views Facebook more as a way to connect people than a business, and he has been adamant about limiting the impact of ads on user experiences. Indeed, his reluctance to flood the social network with ads is widely viewed as one reason why Facebook endured while an earlier rival, MySpace, expired."Mark has an evangelical approach to advertising," said Martin Sorrell, chief executive of WPP Plc, the world's largest advertising agency. "He sees Facebook as a vehicle to open up communication, not to monetize."

But with 85 percent of its revenue derived from advertising last year -- when revenue was $3.71 billion, Facebook realized it needed to strike a more cooperative tone with Madison Avenue ahead of its initial public offering and the accompanying intense scrutiny on profit growth.Advertising sources identified Everson, along with David Fischer, vice president of business and marketing partnerships, and Blake Chandlee, vice president of global agency relations, as the triumvirate leading Facebook's charm offensive. triumvirate In ancient Rome, usually a board of three officials who assisted higher magistrates in judicial functions, oversaw festival banquets, or ran the mint. The First Triumvirate (60 BC) of Pompey, Julius Caesar, and Crassus was an informal group of three strong leaders with no sanctioned powers. The Second Triumvirate (43 BC), consisting of Mark Antony, Lepidus, and Octavian (later Augustus) — formally tresviri rei publicae constituendae ("triumvirate for organizing the state") — held absolute dictatorial power."It's been remarkably different over the last 12 months," Michael Hayes, president of digital at advertising firm Initiative, said of Facebook's attitude toward the advertising community."They didn't really have a relationship with us before, but now they are trying to establish a relationship. I've definitely seen an uptick in their interest in working with us," he said.Last September, Facebook set up a committee consisting of executives from brands that advertise on the site, as well as representatives from many top ad agencies, to regularly provide feedback on its advertising products and services.The company also commissioned Hayes' firm, Initiative, to compare the success of Facebook ads against other media, such as television, the first time it asked for such a study.Sorrell said Facebook plans to introduce new advertising products by the end of February. A source familiar with the announcement said it would center on new products around mobile advertising, but did not provide further details.A Facebook representative declined to comment on any new product announcements or to make Everson available for an interview, citing the quiet period ahead of the IPO.ADVERTISING, FRIEND OR ENEMY?Facebook, which boasts 845 million users worldwide, is more dependent on ad sales than CBS Corp, the most ad-dependent traditional media company, which derives two-thirds of its revenue from advertising.Facebook ranks as the top provider of graphical online display ads in the United States, accounting for roughly 28 percent of the total "impressions" of such ads last year, according to industry research firm comScore.But analysts say the price that Facebook charges for the bulk of its ads is lower than those of other forms of online ads, such as the branding campaigns popular on sites such as Yahoo or the search ads offered by Google.Facebook is taking steps to make its ads more valuable to marketers by integrating social networking features with "sponsored stories" or ads that highlight a user's friends who have "liked" a certain product.The big question is whether Facebook can further evolve its advertising offerings, which are tempered by privacy laws and the changing parameters around how social networks can mine user data for targeted marketing."Their ad product opportunities aren't too robust right now, and the effectiveness is spotty at best," Hayes said.Facebook has come under criticism for the way it has used member data in the past, including in 2008 when its Beacon advertising product was assailed for disclosing such things as what purchases people were making on Amazon.com to their friends without permission.Companies have also removed ads from being displayed against offending user or group profiles, not unlike how brands pull commercials on television shows in protest.Facebook listed the evolving nature of privacy and data protection laws as two risk factors that could impinge future growth in a regulatory filing.Still, the key for Facebook, according to David Eastman, president of digital at JWT, which is part of the WPP group, is keeping Wall Street at bay while it figures out how to monetize its role as an identity broker."I'm worried about how the IPO will affect creative," said Eastman. "I'm worried that the demand for growth and making numbers will get in the way of really evolving the platform to figure out how to monetize influence."EVERSON AT BATIf Everson and her team can establish that equilibrium, the opportunities for Facebook are enormous.Internet advertising is expected to grow at an annual average rate of 15.9 percent to $113 billion in 2014, from an estimated $84.2 billion this year, according to Zenith Optimedia. That makes the Internet the second-largest ad market behind TV, which by 2014 will reach $215.7 billion.Facebook currently commands only a sliver of agency ad dollars. In 2011, Sorrell said WPP spent $1.6 billion with Google and just $200 million with Facebook. This year Sorrell, who labeled Google a "frenemy" in 2006, expects to spend $2.3 billion with the search giant and $400 million with Facebook.Sorrell said the disparity is because of the greater difficulty of monetizing social media. Not to mention that the increased competition with Google in recent years has made it a "friendlier frenemy," Sorrell added with a laugh."Facebook is a superb branding medium, but right now it is more about PR than advertising," he said.In June, Google launched its own social network, Google+, to compete with Facebook. The service, which does not currently display any advertising, has won praise for innovative features such as group-video-chat technology and a design that allows users to easily sort friends into different groups.Sorrell said the two services are preparing for a "battle royal" to win the future of social advertising."There's a real battle shaping up and the competition is intense," he said, adding that from the advertising community's perspective more options are better than less.Everson, who left Microsoft after nine months, is on the front lines of that battle for Facebook.A New Jersey native, Everson graduated in 1999 with an MBA from Harvard. She was pegged as a "Woman to Watch" by trade publication Advertising Age last May, where her profile noted that she got married in Disney World and had Wyclef Jean rap a song about her twin daughters."Since she's joined, Facebook has definitely turned up the heat on getting cozy with agencies," said JWT's Eastman. "There are lots more opportunities to get closer and more involved with them."(Reporting By Peter Lauria, additional reporting by Alexei Oreskovic; Editing by Tiffany Wu and Leslie Adler)=========================Analysis: More than just Great Firewall awaits Facebook in ChinaWed, Feb 08 06:54 AM ESTBy Melanie LeeSHANGHAI (Reuters) - When it comes to China, Facebook should consider itself forewarned. Cracking the world's biggest Internet population might seem an obvious ambition for the social networking giant as it trumpets its global growth before a $5 billion initial public offering, but the chances it will succeed look slim.Facebook said last week it was contemplating re-entering China, the world's second-biggest economy, after being blocked nearly three years ago.But its offering would likely face intense competition, political meddling and little commercial success.Few foreign Internet companies have succeeded in China. EBay Inc, Google Inc, Amazon.com Inc, Yahoo Inc and most recently Groupon Inc form the list of notable online players who have failed to gain traction in the fast-growing nation of 1.3 billion people."It's actually a bit late for Facebook," said Hong Kong-based CLSA analyst Elinor Leung, who added that the market was already quite saturated with local players such as Sina Corp, Renren Inc, Kaixinwang001 and Tencent Holdings.Facebook first launched its Chinese interface in 2008 but was blocked by Beijing in mid-2009 following deadly riots in the western province of Xinjiang that authorities say were abetted by the social networking site."It will be very difficult for Facebook to introduce something that will allow them to differentiate themselves," CLSA's Leung said.Almost half of China's 500 million Internet users use social networking sites, government data showed in January.The dominant players among China's social networking sites (SNS) are Renren and Sina Corp, which is attempting to turn its highly popular microblogging service, Weibo, into a full-fledged social network.WILL CHINA "LIKE" FACEBOOK?Domestic sites have flourished into self-contained ecosystems with their own suite of apps, news portals, micro-currencies and e-commerce options, making it hard for Facebook, if it gained entry, to compete, industry players say."China's SNS space is more crowded and competitive than the U.S. with multiple large and established players all investing for long-term growth," said Joe Chen, chief executive of Renren, which would become a direct competitor with Facebook should the U.S. giant enter the market."Facebook will enter a much more competitive market with a significantly different culture, business environment and other characteristics than what it has previously experienced in the global market," Chen added.Analysts agreed."The Chinese have been social for years, and Facebook would be just one more option among many," said Sam Flemming, founder of Shanghai-based social media consultancy, CIC."It certainly would have a certain amount of cache, especially among the more internationalized Chinese and foreigners living in China, but it would need a big push in awareness beyond this small group," Flemming said.Foreigners and Chinese citizens who want to access Facebook and other blocked sites must use special VPN software to get around China's firewall to do so, meaning a very limited number of Chinese currently use it.CHINA RELATIONSHIP: IT'S COMPLICATEDFacebook would face the same factors that have led to the failure of many foreign Internet companies in China: nimble local competition, murky government regulation and bureaucracy, and difficulty in adapting to local tastes.Complying with Beijing's regulations can also carry a cost in Facebook's established Western markets -- companies such as Google and Cisco Systems Inc have faced criticism at home over accusations of cooperating with the Chinese authorities' efforts to control online content.Google, considered the most successful foreign Internet company to make a foray into China, managed to secure only 30 percent of the Chinese search market before pulling out in early 2010, after a serious hacking episode and a reluctance to censor further in China.It still maintains a presence in the country through a site hosted in Hong Kong."The way for Facebook to be in China would be for them to build or buy a local team and allow them to craft a product to suit the local market over the long run. Then they may have a decent chance to compete, not guaranteeing that they will win," said Dominic Penaloza, chief executive of Chinese professional social-networking site, Ushi.cn.Penaloza said many foreign Internet firms had failed in China because they were unwilling to give such autonomy to their local partners.Early last year, Facebook was reportedly in exploratory talks with potential Chinese partners. Analysts said Facebook would have to manage and censor content heavily in order to gain Beijing's blessing for entry.Twitter and YouTube are also blocked in China, while domestic social networks have to heavily censor and weed out content that Beijing deems undesirable.Facebook said in its IPO prospectus that the firm was evaluating entering China, but notes that the market has "substantial legal and regulatory complexities."A walled-off Facebook, or a heavily censored Facebook for China, may not be appealing to users as Facebook's selling point is its sprawling international reach and open nature."Chinese consumers don't ever want to have some second class offering or some dumbed-down offering," said Duncan Clark, chairman of Beijing-based consultancy BDA China.(Editing by Kazunori Takada and Alex Richardson)=======================

Goldman fund to exit company owning sex traffic site

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Analysis & Opinion

What does a pope do? Fidel Castro asks Pope Benedict
Forget Greg Smith. For Goldman exposé, read Hudson CDO ruling

By Ilaina Jonas

NEW YORK | Sun Apr 1, 2012 9:41pm EDT

(Reuters) - A private equity fund run by Goldman Sachs Group Inc (GS.N) has agreed to sell its stake in the media company that runs a sex trafficking forum back to company's management, a spokeswoman said on Sunday.

GS Capital Partners III on Friday signed a deal to sell its 16 percent stake in Village Voice Media, which owns the website, called Backpage.com.

The fund began negotiations with Village Voice Media in March, after deciding in 2010 that it had grown "uncomfortable with the direction of the company," and Goldman's inability to influence its operations, said Andrea Raphael, a Goldman Sachs spokeswoman.

The sale was first reported in a Nicholas Kristof column in The New York Times on Saturday. The fund's investment was also the subject of a Kristof column last week.

Raphael said the fund invested $30 million in the Village Voice in 2000. The investment was converted into a 16 percent minority stake when the Village Voice merged with New Times Inc in 2006.

She declined to disclose the sales price, but said the fund lost a "vast majority" of its investment.

Village Voice Media was not immediately available for a comment.

Online prostitution advertising generated at least $3.1 million in revenue in February, on five U.S. websites, an increase of 9.8 percent from a year earlier, according to interactive media and classified advertising consultant AIM Group. Nearly 80 percent of the revenue was attributed to Backpage.com, AIM said in a report published March 22.

Village Voice Media owns the alternative newspaper The Village Voice, which was founded in 1955.

Over the years, the newspaper has published groundbreaking investigations and received three Pulitzer Prices. Its back pages, in contrast, have for decades been the bastion of escort service advertising.

Backpage.com also posts lists for hundreds of other classified advertising throughout the country.

(Reporting by Ilaina Jonas, Editing by Gary Crosse and Maureen Bavdek)

Facebook has privacy gaps: Canadian watchdog

OTTAWA (Reuters) - The popular social networking site Facebook is not doing enough to protect the personal information it gets from subscribers, and it gives users confusing and incomplete information about privacy matters, Canada's privacy commissioner said on Thursday.

"It's clear that privacy issues are top of mind for Facebook, and yet we found serious privacy gaps in the way the site operates," Privacy Commissioner Jennifer Stoddart said in a report on an investigation into Facebook.

The report said Facebook violates Canada's privacy laws by keeping the personal information of people who have deactivated their accounts in its databases indefinitely.

It provides confusing information about privacy practices, for example showing users how to deactivate accounts but not how to delete them.

Facebook told the commissioner it needed to keep personal data for those who shut down accounts because about half of users reactivate accounts that they had deactivated.

The report said Facebook had strenuously objected to some of the commissioner's preliminary conclusions, and the company said on Thursday it would continue to work with her to address outstanding areas and to raise awareness of privacy controls.

Facebook has 200 million active users, including about 12 million in Canada -- more than one in three Canadians.

The report will set a precedent for other networking sites operating in Canada, and could influence practice in other countries. Stoddart said she believed Canada was the first to publish a formal privacy investigation of Facebook's practices.

Stoddart also said Facebook lacked adequate safeguards to prevent unauthorized access to users' personal information by third-party developers. There are more than 950,000 developers in 180 countries.

She said Facebook had resolved some issues and she gave it 30 days to comply with a series of "recommendations", and said she could take it to Federal Court to enforce the recommendations.

Facebook's chief privacy officer, Chris Kelly, told Reuters in San Francisco he did not expect this to be necessary.

"Given that we've had very productive conversations, I would be surprised if things move in that direction. Now, that being said, we don't believe that there is any violation of Canadian law here and we think that a court would find that, were either party to go in that direction," he said.

He also said Facebook did not want to end up with too many notifications interrupting users, and said any solutions should "reflect the fact that people come to Facebook to share information as opposed to hide it."

The investigation was launched in response to complaints by the Canadian Internet Policy and Public Interest Clinic (CIPPIC) at the University of Ottawa.

In a written statement, Facebook said it was "pleased that the Canadian federal privacy commissioner has dismissed the most of the inaccurate claims brought by CIPPIC, and that we were able to collaboratively resolve other issues raised in the complaint."

(Additional reporting by Alexei Oreskovic in San Francisco; editing by Janet Guttsman and Peter Galloway)

===




-- The author is a Reuters Breakingviews columnist. The opinions expressed are his own --

By Jeffrey Goldfarb
NEW YORK, May 4 (Reuters Breakingviews) - Goldman Sachs got its Facebook stake for a steal. That's if Renren is anything to go by. Shares in China's answer to the social networking giant priced at the top of their indicated range and then surged on their first day of trading. That left Renren valued at about 100 times last year's revenue. On that basis, Facebook is worth $200 billion. Goldman bought in at just a quarter of that. With some bubbly assumptions, the higher figure can almost be supported.

The conventional wisdom says otherwise, of course. Many technology watchers see excess already in Facebook's value, which has surpassed $70 billion based on private share dealing. There was added concern last week when Reuters reported that a group of shareholders was trying to offload $1 billion worth of stock in one of the largest sales to date. The Renren-implied valuation would also make Facebook worth more than search behemoth Google -- and not many investors can see their way to that conclusion.
Still, it's possible to make a case of sorts. Global advertising spending across all major media, including TV, magazines and Internet, should tot up to about $470 billion this year, according to ZenithOptimedia. Apply an estimated profit margin of 30 percent and a multiple of 15, and the present value of all those ads would be $2.1 trillion. If the world's consumers were, on average, to spend a tenth of their media time on Facebook, that could make its slice of the pool worth $210 billion.
Perhaps that sounds too generous given that Web advertising dollars aren't yet anywhere near commensurate, relative to usage, with TV or newspapers. But recent research from Nielsen found that Americans spend a quarter of their surfing time on social networking. That suggests plenty of pressure to close the gap -- and grow the whole advertising pot.
Admittedly it takes some suspension of disbelief to arrive at such an eye-watering valuation for Facebook. But Goldman and other investors must be using similar sleight of hand, at least to some degree, to rationalize their own investments in the company. At this point, it may make sense just to play along.

CONTEXT NEWS
-- Shares of Renren, one of China's largest social networks, surged by about 40 percent in afternoon trading to more than $19 apiece, giving the firm an estimated market value of about $7.6 billion, during their stock market debut on May 4. The company reported revenue of nearly $77 million last year.
-- Earlier this year, Goldman Sachs invested in Facebook, and made shares available to some of its clients, at a valuation of about $50 billion. U.S. investors were not allowed to buy in to the offering after media attention on the deal put it at risk of falling foul of U.S. private placement rules.

((jeffrey.goldfarb@thomsonreuters.com))
(Editing by Richard Beales and Martin Langfield)

REUTERS reuters.com

===

GS said GKP was worth 160p, and that was a month before it hit 160p.
GS said that commodities are over priced, and down they go as belief sets in.

GS are the most powerful force on the Planet, controlling the price of many stocks, and before they make a statement, they will have positioned themselves to take advantage of the turmoil they create.

When GS come out with the next statement, they will have acquired what they want, and then release their statement, probably saying there has been an over correction.

GS have always played this game, so to ignore them can make a waterfall effect.

Mikey.