Facebook is on the verge of going pubic this summer. The new name, Facebook, Inc., will certainly help the company in getting to the dazzling heights with extra cash worth around $5 Billion. On the other hand the social network also has other tricks up its sleeve to compete not only on internet but also in other categories.
These new ventures in the pipeline will certainly lure more investors to the stock market and the company’s morale will be boost for sure. However, for now Facebook only has one source of income and that is advertisements on the website Facebook.com.
The social network made $3.7 Billion in revenues and out that figure only one billion dollars were left for net income. This amount is undoubtedly enough for a social network that has free membership to every person in the world but to go public, this not considered at solid persuasion tool.
The Street is relentless when it comes to profits and investors spare no mercy even if it is for betterment of their beloved social network. The main reason for Facebook to take the bold step of plunging into the corporate sector is the fierce competition from Google’s social network, Google +.
Google being one of the most profitable technology organizations in the world has piles of capital to support G+, whereas Facebook is a mere Menlo Park-based organizations that has big dreams to realize.
The only thing that can sway the investors is a solid proof that Facebook is in a competition with physical commodities. Microsoft has Windows, Apple has Macs and Google has Android to show they are in mortar trades. On the other hand, Facebook has only a social network on its portfolio.
However, this may change as Mark Zuckerberg is planning to develop a new smartphone with a Facebook operating system instead of only an application. This might give a boost to the value of the company in front of investors but only a launch is not sufficient. A success is compulsory and odds in the market are not in their favour. The bazaar is saturated with Android-based and iOS-based cellular phones and their spare no mercy on a new product.