Facebook to Delay IPO Till Late 2012?

Facebook will postpone its highly anticipated initial public offering until the end of next year, “in order to keep employees focused on product developments rather than a pay-out,” according to a Financial Times report on Wednesday.

The IPO, expected to be among the largest in the world, had been previously rumoured to be forthcoming by April 2012, though there was also intense speculation that it may have even come by the end of this year.

Facebook will postpone its highly anticipated initial public offering until the end of next year, “in order to keep employees focused on product developments rather than a pay-out,” according to a Financial Times report on Wednesday.

The IPO, expected to be among the largest in the world, had been previously rumoured to be forthcoming by April 2012, though there was also intense speculation that it may have even come by the end of this year.

However, the Financial Times report put rest to these rumours, quoting a source close to Facebook CEO Mark Zuckerberg. The company is also expected to roll out a list of new products and features first before embarking on an IPO.

On Tuesday, Facebook revealed a new feature called Smart List, that bears a resemblance to the Circles feature on Google+. A day later, Facebook presented another new feature called Subscribe, which allows users to follow popular figures without having to add them as a friend or joining a fan page.

Lise Buyer, an consultant who advised Google through its IPO, told the Financial Times that there was no hurry for Facebook to go public.

[quote]“The company doesn’t need the money. It is a little easier to focus when you’re private. They’ll go when they’re good and ready, not before.”[/quote]

Peter Thiel, a prominent Facebook investor, added that it was generally desirable for technology companies to prolong an IPO, citing Google’s example of not going public for nearly six years.

[quote]“It was a good competitive strategy,” he said. “And it culturally orientated people toward long-term value and not quarterly numbers.”[/quote]

In May this year, Facebook’s chief operating officer Sheryl Sandberg described an IPO as “inevitable,” saying it would be “the next thing that happens.” Her remarks sparked constant speculation on the exact date for the company to go public, with some analysts believing that the company could potentially be valued at over US$100 billion.

According to a Reuters report, Facebook made revenues of over US$1.6 billion in the first half of 2011 alone. The company will also be the latest in a line of Internet companies, including Zynga and Groupon, to have delayed its IPO. However, while Zynga and Groupon may have delayed held back on its IPO due to the recent market turbulence, Facebook plans are strictly due to its own internal interests.