Goldmans Investment in Facebook and What it Means for You

A lot of attention has been given this week to Goldman Sachs investment in the popular social network Facebook.  So here are the facts that are important to you.  Goldman Sachs invest its clients money at a valuation of $50 Billion and because of this investment Facebook now has more then 500 shareholders.  You may be saying so what Facebook has 500 shareholders.  500 shareholder is an important milestone in the life of a private company.  Once a company passes 500 shareholders they have 18 months to either IPO or report financials.  Most company because of the costs involved in reporting will just go ahead with an IPO.

Now that Facebook has to share all of its numbers with the world they will need to show strong revenue growth to support their high valuation.  Without a major expansion into China Facebook will probablly only grow to 600-650 million  users.  So with a lack of explosive growth like they have had the past couple of years ( some 400+ million users) they will be forced to do one of the following.

  1. More Targeted ads
  2. Sell premium services to businesses

While on a personal side I don’t want to see more ads, as a marketer I’m excited to see what they can do for me and my clients to connect more with our customers on the site.


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