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Quirky, pioneering companies have long viewed the initial public offering process not only as a chance to raise money but also as an unparalleled PR opportunity—the ultimate expression of their values. In the 1980s ice cream makers Ben Cohen and Jerry Greenfield offered stock to their Vermont neighbors and to the local dairy farmers who were supplying them with milk. In 1995, Boston Beer, the maker of Samuel Adams, announced via ads on its bottles that any loyal drinker could buy into the company at $15 a share. Most famously, in 2004, Google tried to dilute the influence of the big investment banks and ran a so-called Dutch auction, letting prospective investors collectively set the price by submitting blind bids for shares. “It was a uniquely Googley experience,” wrote Chairman Eric Schmidt in the Harvard Business Review in 2010, “that to this day says a lot about who we are.”
Now we come to the most high-profile market debut since Google’s—the Facebook IPO. Mark Zuckerberg and his colleagues are ready to cap one of the greatest entrepreneurial stories of all time with a public offering that will value the company at $75 billion to $100 billion, according to Bloomberg News. That’s roughly four times Yahoo!’s market capitalization, double EBay’s, and around the same valuation as Amazon.com, with its dozens of fulfillment centers around the world. Belying its reputation as a company defined by its users, Facebook appears to be preparing for an entirely conventional IPO, with none of the egalitarian aspirations that characterized those offbeat offerings of the past. By bringing in some of the country’s biggest and most recognizable banks to manage the IPO, Facebook has not only guaranteed those institutions a huge payday; it has also aligned itself with Wall Street at a time when public hostility toward the financial establishment is higher than ever.
The IPO is often a defining moment in the life of a company, the point at which its buoyant values are tested by the rapacious forces of naked capitalism. The act of going public means Facebook is about to become, inevitably, a different beast. As a public firm it will be under pressure to maintain its torrid growth rate, and to continue to push users to share information with one another and with advertisers. Zuckerberg & Co. have never shown that they have any difficulty making these kinds of compromises—and in that sense, their comfortable alliance with the nation’s biggest investment banks shouldn’t be all that surprising. Like many other entrepreneurs, Zuckerberg claims to have a higher calling, but as his S1 filing shows, he’s also out to build one of the biggest companies on the planet.
Facebook was always as much a mission as it was a company. Zuckerberg started the site in his Harvard University dorm room in February 2004 and moved to Silicon Valley a few months later. He soon had almost messianic hopes for the social network, saying repeatedly that he wanted to “give people the power to share and make the world more open and connected.”
In the IPO filing on Feb. 1, Zuckerberg continued to remind the world that his company is not conventional in any sense, asserting that “Facebook was not originally created to be a company” and describing its internal culture as “the hacker way.” The prospectus continues: “There is a huge need and a huge opportunity to get everyone in the world connected, to give everyone a voice and to help transform society for the future.” The regulatory filing was chock-full of revelatory details. Facebook saw sales of $3.7 billion in 2011, up from $1.9 billion in 2010, and the company made $1 billion in profit last year alone.
