Mark Zuckerberg Gone Rogue

Facebook’s Trashy Future Revealed by Target’s Selling of Credit Gift Cards

Facebook made another big step toward world domination today, by tying up a deal with Target to put gift card versions of its Credits on sale. Yep, retail meets e-tail. Virtual currency made plastic. The cards, which go on sale on Sunday, Sept. 5, are available in three sizes: $15, $25, and $50–although the lowest increment is exclusive to Target. Which says a lot about Target customers. And, it seems, Facebook.

It’s a logical move for Mark Zuckerberg’s gang–after all, his chum Sean Parker estimated earlier this year that Facebook’s Credits system would account for around one third of the social network’s revenue. So having it available in as many forms as possible instead of merely the bank of Mom and Dad–i.e. their bank cards–is not a bad idea at all.

Earlier this summer, Facebook signed a deal with MOL Global, a firm that brings virtual credits to real stores via its terminals in Asia and Australasia. And it’s not the first go at turning teens’ cold hard cash–the carwashing, the babysitting money–into something that can be used online. In March, Rixty, purveyors of online accounts, and Coinstar, the one-time change converter, signed a deal to allow loose change to be converted into vouchers for online use.

There is, perhaps, a silver lining to this, however. As well as demonstrating that Facebook may be looking to extract money from people with a bad credit rating (and therefore no credit card), as well as potentially paving the way for check cashing services to offer Facebook credit and Lotto cards as part of the deal, perhaps this could be one way of teaching your kid about the value of money. “You wanna buy the FarmVille, son? You gotta save your money and buy your own credits at Target. I’ll grab a three-pack of tighty whities while we’re there.”

2 days ago No Comments »

Facebook faces campaign to switch to renewable energy

Social networking site under fire over intention to run giant new data centre mainly on coal-powered electricity

Social networking website Facebook is coming under unprecedented pressure from its users to switch to renewable energy. In one of the web’s fastest-growing environmental campaigns, Greenpeace international says at least 500,000 people have now protested at the organisation’s intention to run its giant new data centre mainly on electricity produced by burning coal power.

Facebook will not say how much electricity it uses to stream video, store information and connect its 500m users but industry estimates suggest that at their present rate of growth all the data centres and telecommunication networks in the world will consume about 1,963bn kilowatt hours of electricity by 2020. That is more than triple their current consumption and more electricity than is used by France, Germany, Canada and Brazil combined.

Facebook announced in February that it planned to build what is expected to be the world’s largest centralised data storage centres in Portland, Oregon. Although it will include some of the world’s most energy-efficient computers, the sheer scale of the Facebook operation will almost certainly use more electricity than many developing countries.

The company has said it will source its electricity from Pacific Power. It uses coal power – the dirtiest form of power generation – for 67% of its electricity, and produces less than 12% of its electricity from renewable sources. The company has said it plans to generate more electricity from renewables in future but has given no detailed information.

In a statement Facebook said: “It is true that the local utility for the region we chose, Pacific Power, has an energy mix that is weighted slightly more toward coal than the national average. However, the efficiency we are able to achieve because of the climate of the region and the reduced energy usage that results minimises our overall carbon footprint.

“Said differently, if we located the data centre most other places, we would need mechanical chillers, use more energy, and be responsible for more overall carbon in the air – even if that location was fuelled by more renewable energy.”

Kumi Naidoo, director of Greenpeace International, urged Facebook CEO Mark Zuckerberg to commit his company to a plan to phase out the use of dirty coal-fired electricity. In a letter to Facebook, Naidoo said: “Facebook is uniquely positioned to be a truly visible and influential leader to drive the deployment of clean energy.”

Earlier this year Greenpeace admitted that many of its own web hosting operations are also housed in data centres powered primarily by coal and nuclear power. The environmental group said it offset all the energy used to power its main website in Amsterdam and used renewable energy where it could. Many of its servers in Washington also used wind power.

2 days ago No Comments »

Now on Sale at Target: Facebook

Inevitable but important move for Facebook: It is now selling gift cards for its newish “Facebook Credits” currency, starting with a rollout at Target (TGT) stores this week.

Facebook Credits are a big deal for Facebook because they should create an important revenue stream for Mark Zuckerberg and company. The credits are supposed to power Zynga’s games and other virtual-goods vendors, and Facebook takes a 30 percent cut of each sale.

And gift cards are a big deal for Facebook Credits because people really like buying gift cards–they buy some $86 billion worth of them a year. In the Web world, they’re very important for kids and anyone else who want to buy things online but don’t have access to credit cards.

And they’re incredibly popular for people who want to buy someone a present but have no idea what to get–I’ve heard estimates that something like 40 percent of Apple’s (AAPL) iTunes purchases are funded by gift cards. If the Facebook folks end up with anything remotely as popular they’ll be very happy.

2 days ago No Comments »

Facebook Won’t Run Ads for “The Social Network,” but Facebook Users Like It Anyway

Facebook loves Hollywood ad dollars, except in the case of one particular film. That would be “The Social Network,” the upcoming film best known as “The Facebook Movie.”

As Kara Swisher pointed out in July, Facebook isn’t accepting ads from Sony (SNE), the movie’s distributor. The reason, in so many words: Facebook and Mark Zuckerberg don’t like the movie.

Fair enough: Sony has figured out plenty of ways to get buzz for the movie online, via both paid routes (“Promoted Twitter” ads) and unpaid gambits (viral videos, of course).

And now, in a lovely bit of irony, the “The Social Network” is being advertised on Facebook, after all. For free. By Facebook’s users.

As Forbes’s Dorothy Pomerantz explains, Sony is asking Facebook users to “like” the movie, and they’re complying: So far, some 29,000 Facebookers have endorsed the movie via a button click, which translates into some 29,000 individual “thumbs up” ads appearing in Facebook users’ streams.

Pretty clever, no?

I’m giving the movie a previewing thumbs-up, too, for what it’s worth–I’m really excited to see it. And not because I think it’s going define Generation Y or anything like that (beware of explicitly “generation-defining” movies, by the way–you’ll end up with “Reality Bites”). It’s because I think it’s going to be awesome: Aaron Sorkin is great with the words, and David Fincher makes great images.

And if that doesn’t sell you, maybe another view of the trailer, scored by a cover of Radiohead’s “Creep,” will help.

(Happy Birthday, Ben!)

2 days ago rss No Comments »

Zynga’s Newest Deal: Snagging MySpace, Facebook Vet Owen Van Natta

Zynga, the dominant social-gaming company that seems to spend most of its time raising money, has finished up yet another deal: It has officially brought in Web veteran Owen Van Natta, giving him the title “Executive Vice President of Business Operations.”

Following last month’s hire of Allen & Co. vet David Wehner as CFO, the move will be interpreted as yet another signal that Zynga is moving toward a big-money public offering. Zynga officials won’t comment on the hire. But if they did, they would sidestep the IPO talk and mutter something about hiring a first-class team, etc, etc.

In any case, there’s no argument that this is Van Natta’s third high-profile Web company in two years. He was a top lieutenant for Mark Zuckerberg at Facebook until February 2008, and in 2009 he took over News Corp.’s (NWS) MySpace, a job that lasted less than a year. Earlier in his career, he made a name for himself at Amazon (AMZN). He also popped in for a very brief stint as CEO at Project Playlist, a streaming-music company that has just filed for Chapter 11.

Kara Swisher sniffed out the hire last month, when she reported that Van Natta was spending a lot of time at Zynga in an unofficial role. She predicted a formal title in his near future, as Facebook prepared for both an IPO and head-on competition with Google (GOOG), which is moving into gaming and social networking:

Sources said [that] has prompted Pincus to increasingly bring in Van Natta as an adviser to the start-up, focused mostly on strategy and operations.

And, said sources, that could eventually result in a more formal role, such as Van Natta joining Zynga in an official job, like COO. Many say that both have been seriously contemplating such a move in recent weeks.

In fact, at the recent Allen & Co. media confab in Sun Valley, which both attended, Van Natta and Pincus told many of Van Natta’s more substantive advisory role.

A COO job like that would not be a big leap for Van Natta, who was COO and close adviser to Facebook CEO and founder Mark Zuckerberg at the nascency of the company.

Zynga’s official bio for Van Natta:

Owen Van Natta is the Executive Vice President of Business Operations at Zynga. In this role, he is responsible for the company’s revenue strategy, corporate development, international expansion, and brand. Prior to joining Zynga, Owen was consulting for the Company across a number of critical business functions. Owen is also a member of the Zynga Board.

3 wks ago No Comments »

Decoding Google’s Net Neutrality Proposal Blog: The Pixie Dust-Free Edition!

The opening line of the classic J.M. Barrie book “Peter Pan” reads, “All children, except one, grow up.”

Actually, that one grew up, too, and now the whole Internet is angry at Google (GOOG) and taking shots, because of the Silicon Valley search giant’s recent joint public-policy proposal with Verizon (VZ) over net neutrality.

Many are claiming Google–in the most cynical of ways–sold out its long-standing commitment to the open Internet to make a corporately favorable deal.

Thus, Google–in this case, Richard Whitt, Washington Telecom and Media Counsel–took to the corporate blog yesterday to explain it all away in a post titled “Facts About Our Network Neutrality Policy.”

It practically begs for translation, so BoomTown shall not disappoint:

Google wrote: Over the past few days there’s been a lot of discussion surrounding our announcement of a policy proposal on network neutrality we put together with Verizon. On balance, we believe this proposal represents real progress on what has become a very contentious issue, and we think it could help move the network neutrality debate forward constructively.

We don’t expect everyone to agree with every aspect of our proposal, but there has been a number of inaccuracies about it, and we do want to separate fact from fiction.

Translation: Wait, the hypnotic multicolored letters aren’t working anymore? What about the cute logos on the homepage–didja see our whimsical “Wizard of Oz” montage? Hey, our founders still wear wacky shoes!

And look over here at the Googleplex: Segways with wings and coconut-water lattes for all!

Okay, we’ll come clean: This band of Lost Boys–and Wendy who runs search–didn’t want to grow up, either.

But Sheryl Sandberg did an Indian talent raid and convinced Tinkerbell to take all her fairy dust to work on magical social-marketing features at Facebook. Also, Captain Hook and that alligator are working up some geo-location thing with the ticking clock over at Foursquare.

In other words, that’s Mr. Peter Man to you now.

Google wrote: MYTH: Google has “sold out” on network neutrality.

FACT: Google has been the leading corporate voice on the issue of network neutrality over the past five years. No other company is working as tirelessly for an open Internet.

But given political realities, this particular issue has been intractable in Washington for several years now. At this time there are no enforceable protections–at the Federal Communications Commission or anywhere else–against even the worst forms of carrier discrimination against Internet traffic.

With that in mind, we decided to partner with a major broadband provider on the best policy solution we could devise together. We’re not saying this solution is perfect, but we believe that a proposal that locks in key enforceable protections for consumers is preferable to no protection at all.

Translation: We caved. In fact, we spelunked. All right, we journeyed to the center of the earth. Second to the right and straight on till morning, times a google.

But it is not technically selling out, since we got no money in the deal. I mean, not yet.

That comes later, when we and Verizon control all the tolls on the private and exclusive Schminternet, named for Fearless Leader and CEO Eric Schmidt (pictured here), coming to you in 2020!

We’re not saying the solution is perfect. But we believe that a proposal that locks in key moneymaking fees for us is preferable to having to struggle later–like those losers at Microsoft (MSFT) do today–when the search business goes the way of boxed software.

Google wrote: MYTH: This proposal represents a step backwards for the open Internet.

FACT: If adopted, this proposal would for the first time give the FCC the ability to preserve the open Internet through enforceable rules on broadband providers. At the same time, the FCC would be prohibited from imposing regulations on the Internet itself.

Here are some of the tangible benefits in our joint legislative proposal:

* Newly enforceable FCC standards
* Prohibitions against blocking or degrading wireline Internet traffic
* Prohibition against discriminating against wireline Internet traffic in ways that harm users or competition
* Presumption against all forms of prioritizing wireline Internet traffic
* Full transparency across wireline and wireless broadband platforms
* Clear FCC authority to adjudicate user complaints, and impose injunctions and fines against bad actors
* Verizon has agreed to voluntarily abide by these same requirements going forward–another first for a major communications provider. We hope this action will convince other broadband companies to follow suit.

Translation: Did you ever do the Hokey Pokey? Jockeying for political power in Washington is like that, except someone always loses an eye.

You put your eternal soul in,
You put your ethics out;
You put your corporate standards in,
And you shake them all about.
You do the Hokey-Pokey,
And you turn yourself around.
That’s what it’s all about!

Which is why they say you should never watch sausage being made.

Google wrote: MYTH: This proposal would eliminate network neutrality over wireless.

FACT: It’s true that Google previously has advocated for certain openness safeguards to be applied in a similar fashion to what would be applied to wireline services. However, in the spirit of compromise, we have agreed to a proposal that allows this market to remain free from regulation for now, while Congress keeps a watchful eye.

Why? First, the wireless market is more competitive than the wireline market, given that consumers typically have more than just two providers to choose from. Second, because wireless networks employ airwaves, rather than wires, and share constrained capacity among many users, these carriers need to manage their networks more actively. Third, network and device openness is now beginning to take off as a significant business model in this space.

In our proposal, we agreed that the best first step is for wireless providers to be fully transparent with users about how network traffic is managed to avoid congestion, or prioritized for certain applications and content. Our proposal also asks the Federal government to monitor and report regularly on the state of the wireless broadband market. Importantly, Congress would always have the ability to step in and impose new safeguards on wireless broadband providers to protect consumers’ interests.

It’s also important to keep in mind that the future of wireless broadband increasingly will be found in the advanced, 4th generation (4G) networks now being constructed. Verizon will begin rolling out its 4G network this fall under openness license conditions that Google helped persuade the FCC to adopt. Clearwire is already providing 4G service in some markets, operating under a unique wholesale/openness business model. So consumers across the country are beginning to experience open Internet wireless platforms, which we hope will be enhanced and encouraged by our transparency proposal.

Translation: By transparency, we mean a backroom deal so covered in the fog of compromise that it was like the Smoke Monster in “Lost.”

And you know what happened when he (she? it?) showed up. Not pretty.

Neither was the fact that we had to throw wireless–the most promising of networks–under the bus right now. While there is likely to be some crushing of competition and mangling of the bones of this little baby, you can be sure Congress can always step in to protect consumers’ interests with regard to wireless broadband.

In fact, Congress just hired Kate and Jon Gosselin to give parenting tips on how not to completely take advantage of the wired Internet’s most valuable offspring.

Google wrote: MYTH: This proposal will allow broadband providers to “cannibalize” the public Internet.

FACT: Another aspect of the joint proposal would allow broadband providers to offer certain specialized services to customers, services which are not part of the Internet. So, for example, broadband providers could offer a special gaming channel, or a more secure banking service, or a home health monitoring capability–so long as such offerings are separate and apart from the public Internet. Some broadband providers already offer these types of services today. The chief challenge is to let consumers benefit from these non-Internet services, without allowing them to impede on the Internet itself.

We have a number of key protections in the proposal to protect the public Internet:

* First, the broadband provider must fully comply with the consumer protection and nondiscrimination standards governing its Internet access service before it could pursue any of these other online service opportunities.

* Second, these services must be “distinguishable in purpose and scope” from Internet access, so that they cannot over time supplant the best effort Internet.

* Third, the FCC retains its full capacity to monitor these various service offerings, and to intervene where necessary to ensure that robust, unfettered broadband capacity is allocated to Internet access.

So we believe there would be more than adequate tools in place to help guard against the “cannibalization” of the public Internet.

Translation: Yes, the very same government that protected its citizens from the sub-prime mortgage mess by monitoring those giant, risk-mad banks so well.

The same government that was making sure oil giants like BP adhered to strict safety standard for its offshore wells.

The same government…well, you get the general idea, but you should have no fear of cannibals.

Of sharkish telcom companies, yes. Of man-eating lions from the cable business, certainly.

But of multicolored, letter-decorated piranhas who look harmless with their big squishy balls and organic guava smoothies but will cut you as soon as you stick one consumer finger in the digital pond?

Let’s just say: Don’t go in the water.

Google wrote: MYTH: Google is working with Verizon on this because of Android.

FACT: This is a policy proposal–not a business deal. Of course, Google has a close business relationship with Verizon, but ultimately this proposal has nothing to do with Android. Folks certainly should not be surprised by the announcement of this proposal, given our prior public policy work with Verizon on network neutrality, going back to our October 2009 blog post, our January 2010 joint FCC filing, and our April 2010 op-ed.

Translation: Rachel, are you in London or back in Mountain View? Please ring us up asap, as you need to come up with some fancy new talk. I don’t think they are buying this policy-proposal-not-a-business-deal pablum.

In fact, I am even giggling every time I write it.

Google wrote: MYTH: Two corporations are legislating the future of the Internet.

FACT: Our two companies are proposing a legislative framework to the Congress for its consideration. We hope all stakeholders will weigh in and help shape the framework to move us all forward. We’re not so presumptuous to think that any two businesses could–or should–decide the future of this issue. We’re simply trying to offer a proposal to help resolve a debate which has largely stagnated after five years.

It’s up to Congress, the FCC, other policymakers–and the American public–to take it from here. Whether you favor our proposal or not, we urge you to take your views directly to your Senators and Representatives in Washington.

We hope this helps address some of the inaccuracies that have appeared about our proposal. We’ll provide updates as the situation continues to develop.

Translation: Indeed, two corporations are not legislating the future of the Internet.

In point of fact, there were at least a half-dozen of us on the G5 on the way back from divvying up the Web in D.C.

And we’re not so presumptuous to think that any two businesses could–or should–decide the future of this issue.

We are planning on including at least six or seven more businesses, since it will cost an awful lot of money to peddle all that influence in D.C.

Of course, that Mark Zuckerberg over at Facebook seems to be holding out and even criticizing our Verizon bear hug.

That kid has some guts all right–but he can’t live in Neverland forever.

At some point, you’ve got to grow up. You can’t clap your hands and believe you can fly. Even pixie dust eventually runs out.

And that’s something we at Google know very, very well by now.

And until the magic returns, please relish the incomparable Mary Martin in the famous stage version of “Peter Pan” singing “Never Never Land.” As Peter Pan described himself, “I’m youth, I’m joy. I’m a little bird that has broken out of the egg.” Martin is all that and more:

“Never Never Land”
Uploaded by computergirl07. – Music videos, artist interviews, concerts and more.

3 wks ago rss No Comments »

Tech Weekly: Google’s access plans

Aleks Krotoski is joined in the studio by Jemima Kiss, Robert Andrews and mendeley.com’s Victor Henning for this week’s packed programme. The team tackle the web: collaboration, governance and net neutrality before sliding smoothly into a discussion of social innovation with Charles Leadbeater.

First up, what does the Google-Verizon deal mean for how we access the web and who can build content for it? The team are divided. What do you think?

In other Google news, what happened to Wave? Jemima and Robert weigh in on why the search engine’s aggregated email/instant message/collaboration service failed to live up to expectations, and what this means for the “iterate and iterate often” culture of web development.

Richard Buchanan phones in to talk about the Facebook users’ union, a new group on the social network that seeks compensation from Mark Zuckerberg himself for the data the site keeps about its membership. Jemima throws in a bit of business advice, free of charge.

Victor pitches mendeley.com, a collaborative tool and social networking facility for researchers, and discusses the ways the web has challenged intellectual property and academic discourse. He proposes a few changes he’d like to see in how research is published and shared.

Finally, Charles Leadbeater, author of We Think, tells Aleks how important web openness is for social innovation.

All this, plus the team’s predictions on who would win in a playground fight – Apple, Facebook or Google – on this week’s Tech Weekly.

Don’t forget to …

• Comment below
• Mail us at tech@guardian.co.uk
• Get our Twitter feed for programme updates or follow our Twitter list
• Join our Facebook group
• See our pics on Flickr/Post your tech pics

Aleks KrotoskiJemima KissRobert AndrewsScott Cawley

3 wks ago No Comments »

Cookie Madness!

I just don’t understand Julia Angwin’s scare story about cookies and ad targeting in the Wall Street Journal. That is, I don’t understand how the Journal could be so breathlessly naive, unsophisticated, and anachronistic about the basics of the modern media business. It is the Reefer Madness of the digital age: Oh my God, Mabel, they’re watching us!

If I were a conspiracy theorist — and I’m not, because I’ve found the world is rarely organized enough to conspire (and I found this to be especially true of News Corp. when I worked there, at TV Guide) — I’d imagine that the Journal ginned up this alleged exposé as a way to attack everyone else’s advertising business just as its parent company skulks behind its pay wall and surrenders its own ad business. But I’m not a conspiracy theorist. That’s why I’m confused.

The story uses the ominous passive voice of newspaper scare stories: “…a Wall Street Journal investigation has found…” As if this knowledge were hiding. Cookies have been around as long as the commercial browser, since October 1994. Or was that 1984?

The piece uses lots of scare words: “surveillance technology” … “tracking technology” … “intrusive” … “no warning” … “surreptitiously re-spawn” … “rich databases” … “so powerful and ubiquitous” … and my favorite: “targeted ads can get personal” (well, yeah, that’s the damned point).

The Journal acts as if it has discovered a conspiracy of its own: “Marketers are spying on Internet users — observing and remembering people’s clicks, and building and selling detailed dossiers of their activities and interests.” Gasp! Mabel, hide the kids, the Romans Huns Krauts Commies Marketers are coming!

There is absolutely nothing new — thus nothing newsworthy — in what the Journal promises threatens to be a series.

The Journal does measure its own cookies, finding its site moderate (I count 34 Journal cookies on my new Mac and I don’t use the site often) in what it ominously calls an “exposure index.” Mabel: Bring the Geiger counter!

Well, except the Journal is unique because unlike the other sites the story writes about, the Journal has my personally identifiable information! It has my friggin’ credit card number and name and address and phone number as well as my web behavior and it allows me to be tracked by third parties. The Journal has more information about me than ANY of the sites it warns about. And the Journal is owned by a company some people don’t trust. Hmmm.

It’s a fine thing that the Journal also tells readers how to “avoid prying eyes.” And if enough people do that, then the value of the advertising-supported web falls. Without cookies, the effectiveness and price of advertising would plummet as ads everywhere turn into remnant junk (smack the money), reducing revenue for media sites and reducing their content to junk. Hmmmm….

A story like this might also affect policy as the FTC is looking at regulating online advertising and marketing; its chairman, Jon Leibowitz testified before Congress on the topic this very week. Hmmm.

I think the Journal should have told exactly how it places and uses every one of its cookies and beacons and ominous tracking surveillance spying technology. It doesn’t. The story doesn’t even link to the paper’s privacy policy, which says that cookies and beacons and all that scary surveillance/tracking/spying technologies are used at WSJ.com and its affiliates and also by third parties over which the Journal has no control. Opportunity lost.

If I were an advertising-supported site, I’d be aggressively transparent. I’d tell you exactly what we track and what impact that has on what we serve in advertising and content. I’d create an app to read the cookies placed just for you and explain them. I’d give you the chance to correct information. I’d give you the chance to select your own advertising (now that would be valuable). I’d treat this with radical openness.

Otherwise the scare mongers like those regulation-loving, anticapitalist commies at News Corp. will win the day.

: Oh, and I neglected to point out that it was the very same Journal that had the wingnutty story about privacy and RFID tags on our pants, quoting as an expert a woman who thinks that RFIDs are — and I exaggerate not — the work of the devil. What the hell is happening there? Are they going out for drinks too often with their new neighbors at the Post?

: Oh and here’s more scaremongering from the commie Telegraph in London, which equates Wikileaks’ Julian Assange with Facebook’s Mark Zuckerberg. Man, we are in silly season.

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1 mo ago No Comments »

Facebook May Put Off IPO Until 2012 [REPORT]

Facebook may postpone its initial public offering to 2012, Bloomberg has learned from three sources familiar with the matter.

This comes as no surprise as Facebook CEO Mark Zuckerberg has always been very careful on the subject. “At some point along the path, I think it’ll make sense to have an IPO. But we’re not running the company to do that. We’re running the company to serve more people,” he said recently.

Facebook’s IPO has been one of the burning topics in business circles in the last couple of years. With the company’s revenue (and valuation) rising swiftly, Facebook is poised to become the next Google, whose initial public offering in 2004 was wildly successful, with the company increasing its market capitalization fivefold over the coming years.

Despite the pressure to go public, Facebook’s IPO seems to be pushed further into the future every year. The wait, however, will give 26-year old Zuckerberg more time to gain more users, sort out the privacy issues that have been plaguing Facebook and, most importantly, boost sales and increase earnings.

Reviews: Facebook, Google

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1 mo ago No Comments »

Facebook’s IPO Waiting Game Gets a Little Longer–”Probably” Not Going Public in 2011

Perennial question for Facebook CEO Mark Zuckerberg: When are you going public? Perennial answer: Someday, probably. But I’m not in a rush.

Now a new report from Bloomberg puts a finer point on it. Citing three anonymous sources, it says the social network will “probably” push off an IPO until 2012.

That certainly sounds plausible. It’s not clear that Facebook needs to raise any cash for operations, given the booming ad business it has finally gotten off the ground. And more money will be coming in the door this year when the company launches its own payment/credits system for virtual goods.

Zuckerberg has structured his board, and ownership structure, so he retains control of the company, so investors who would agitate for an IPO don’t have much leverage. And if the company does want to sell shares, it has plenty of options in the private market.

Assuming Bloomberg’s story is correct, there is at least one significant ripple effect here. If Facebook doesn’t IPO for another 12 months or more, that reduces the pressure on social games giant Zynga to go public too.

The two company’s finances are tightly intertwined–for now, Facebook represents most of Zynga’s revenue, and Zynga is a big chunk of Facebook’s business. Which means that whoever goes public and opens their books first is also opening the other company’s books to some degree. There’s an interesting game of chicken going on there, and it’s worth keeping an eye on.

Meanwhile, if you’re dying to buy Facebook on the open market, you may be able to do it in a roundabout way next year anyway. Russian investor Digital Sky Technologies, which bought a chunk of Facebook last year, is reportedly planning on a 2011 IPO.

1 mo ago No Comments »

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