Hello Jaime,
1) Why do you think Facebook wants to go public?
Facebook seems to generate enough cash to finance its operations. Going public at this time may be due to desire of some of the current entrepreneurs and financiers to cash out. Another reason that the hype about social networking seems to be at its peak – e.g. Zinga and Linked-in had great successes in their initial public offering (IPOs). It is always better to go public when the market is hot.
2) If they finally go public, will Facebook become a battlefield of investors trying to impose their own rules and possibly mess up Facebook for users?
Probably not. Mr. Zuckerberg’s control over facebook will remain tight also after the IPO. Investors understand that in order to generate value, the user’s experience needs to be satisfactory. After all, there is tough competition (Google+). I anticipate, however, that there will be pressure to generate more revenues for Facebook, so we may see more targeted advertising and perhaps new forms to advertising.
3)When companies that large go public, what are the pros and the cons (you can give one example of both)?
For most large firms going public is a one-way ticket. It means that the firm is under greater scrutiny of investors – they demand results. This is typically considered good, but sometimes investors are short-sighted and not like long-term projects. Being public means also that the firm needs to disclose better its strategies, so it may lose some of its competitive edge. It also means that the firm can raise finance more easily and finance new projects. It can expand and conduct more acquisitions of other firms (e.g., competitors or related firms). Finally, a firm that becomes public gets a lot of media attention, as its stock price and performance is constantly discussed.
