The wisdom of web IPOs.

As a social service reliant on its users is Facebook right to go public and do we as consumers need to be concerned of the potential impact?

Facebook IPONumerous articles exist arguing that the big company ethos that accompanies a public listing ruined Google - it has sold out to its new corporate ideals - and others voice obvious concerns that Facebook will head the same way with quarterly returns and shareholder demands becoming all powerful.

But is it, in a way, a conflict of interests for a company that relies so heavily on the end user?

People v dollars

It is not in Facebook's interests to put the almighty dollar firmly ahead of the user as the service is ultimately reliant on its user base for business but there has to be a balancing act. While the user should expect certain standards from the company they must also realise that it is a business which needs to make money; there is no such thing as a free lunch (or social network).

Those saying that Facebook will become the most dangerous company around after IPO are, perhaps, scaremongering to a degree but Facebook must still be held to account to ensure that the pressure to succeed doesn't drive it to act in ways that it shouldn't.

To the limits

Facebook has always pushed the boundaries of online acceptability, especially with regards to privacy, and I see no reason why it will - or should - change just because it becomes a publicly traded company.

Many of the advances we see in social technology have come as a result of Facebook pushing the envelope or reacting to the competition. There have also been some major howlers but modern social networking is still a young field and there are bound to be mistakes (from any company) while the limits of acceptability are defined.

Over time these limits morph and, in many cases, recede as society becomes more familiar, and at ease, with sharing online but the rate of change is not the same for all so we must remain guarded.

Keeping watch

One advantage for the user, and conversely a disadvantage for the company, is that going public suddenly means you have a direct accountability to a lot more "owners" (albeit often in small measure on an individual basis).

Unpopular acts committed when privately owned may cause a few thousand dissenters to close their accounts which is but a drop in the ocean to a company like Facebook. When public, on the other hand, a few thousand dissenters could potentially dump their shares causing a direct financial impact due to falling prices.

This accountability will force Facebook to think twice about any overtly risky practices but I hope not at the expense of stifling innovation.

Image from Facebook's Form S-1 Registration Statement

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