With the economy rebounding, is there any surprise that the world of social media might be primed to take a run on the stock markets? While a 140 banks were forced to close in '09, 140 characters became the digerati's new mantra. Where were you when Google and Apple went public? Sitting on the sidelines? Might be time to keep your ear to ground and listen to the growing digital drumbeats signifying that IPOs could be right around the bend.
Here is my list of Top Social Media IPO Contenders for 2010 or 2011. Please take our POLL at the end of this blog and let us know your favorite(s).
Most imminent to tread the IPO waters is Facebook. The mega-social networking site that reached another milestone with 350 million users last month has also eclipsed its former rival network in ad revenues. According to a eMarketer report, it will surpass MySpace in ad revenues in 2010 when brands are expected to spend $605 million on Facebook versus $385 million on MySpace.
But more important than ad spend is Facebook's recent 'dual-class' stock structure that is making sure that the founders retain control of the company. With Class A and Class B shares, it appears that Mark Zuckerberg is protecting himself and his inner circle from the yielding the floor to outsiders if and when the company goes public. Google (GOOG) structured a similar deal for themselves prior to be listed on the NASDAQ.
A Wall Street Journal report says that, according to its sources, all current shareholders would be converted to Class B shares, which carry 10 times the voting rights of Class A shares. Based on this re-org taking place in late November, the company may be waiting till Q1 of the New Year to issue an IPO. Having raised $600 million in capital from investors over the past five years, with the most recent coming from Russian investor Digital Sky Technologies for $200 million, "there are plenty of stakeholders among the gawkers," notes Tom Johansmeyer in a BloggingStocks.com report.
Twitter, the 140-character wunderkind has rallied from the depth of criticism that it didn't know how to monetize one red cent to striking a lucrative deal with Google and Bing with just two strokes of the pen. Citing anonymous sources, Business Week reported the company received $25 million from syndication deals with Google and Microsoft that allow those companies to post tweets in real-time on their search results. Coupled with raising a whopping $250 million at a $1 billion valuation and striking a deal with Mixer Labs and its GeoAPI service to develop location-based applications - can an IPO be far behind? While Twitter is a very methodical and financial savvy company, my thought is they will continue to ramp up their geolocation technologies in 2010 - and hold out for an IPO roll-out until 2011.
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