The Facebook IPO: Is This The Beginning, or The Beginning of The End?

SAN FRANCISCO, CA — March 6, 2012 –Maven, the Global Knowledge Marketplace, has released the results of two exclusive surveys – one of professional investors and one of social media marketing experts – on Facebook and its future prospects.

The survey of professional investors (including Public Equities Investors, Portfolio Managers, Investment Bankers, and Venture Capitalists) explores the likely success or failure of the IPO, including expected performance of Facebook’s stock for the first three months after the IPO and key drivers that will contribute to that performance.

The survey of social media marketing experts explores Facebook’s effectiveness as a marketing and advertising tool. In addition, respondents were asked for their views on Facebook’s long-term growth prospects, future competition, and factors that will lead to its continued success or potential decline.

“There has been a lot of speculation about the Facebook IPO over the last several weeks,” commented Maven Co-Founder and CEO Wyatt Nordstrom. “We wanted to hear from the real experts – Mavens from the finance and social media marketing professions. With these surveys we went beyond the hype to find out what’s really at stake for Facebook.”

From the social media marketing point of view, Facebook is a very effective marketing and advertising tool. 48 percent of those surveyed indicated they spend 25% or more of their social media marketing budgets on Facebook, and 76% indicated they plan to increase their marketing spend with Facebook in 2012.

There is caution however, regarding Facebook’s continued dominance as a social media platform. Social media Mavens surveyed indicated that over the next two years Google (76 percent) will become Facebook’s biggest competitor with its Google+ platform. Other newly-popular social media sites such as Pinterest were also mentioned as potential competitors. Items impacting the user experience, including privacy controls, user interface changes, and increased advertising were also cited as potential issues for Facebook.

One social media Maven commented:

As Facebook starts to put in more advertising, and continues to constantly change its design and format, users will become weary and move away to the newer networks such as Pinterest and Google +.

Another respondent added:

Facebook’s growth has already slowed from its record pace over the last few years and Google+ is beginning to take hold with the more affluent of Facebook’s users. Google+ is included in Google Search whereas Facebook profiles are not. Facebook will be a strong competitor, however Google+ may take some market share away from it.

“Our Financial Mavens had some interesting insight, as well,” added Nordstrom. “It would appear that the smart money is staying on the sidelines. As a group they are avoiding the hype of the IPO, though they do predict that the stock price will rise over the first 90 days.”

Financial professionals that were surveyed indicated that they would either wait until the market reacts to the IPO (44%) or that they did not plan to invest in Facebook at all (44%).

Several respondents indicated that this may be a pure “retail” play.

One Maven put it this way:

There will be significant retail interest in the Facebook IPO right out of the gate. Institutional investors will likely flip a portion of their holdings. Facebook will be the first big IPO since the technology bubble to bring back retail investors to the public markets.

Another respondent added:

IPO price, publicity, hype and expectations will be too high with too many investors buying to “flip”. Post the IPO valuation comparisons to other public companies will make this look too expensive.

When asked by what percentage Facebook stock would rise in the first quarter after the IPO, investors predicted a median increase of just over 12 percent.

A large majority (96%) of the financial Mavens surveyed believed that while Facebook’s membership will increase over the next two years, it will do so at a much slower rate.

Members of the news media interested in speaking with the Survey respondents should contact Chuck Hester, PR Maven at chester-at-maven-dot-co.

About Maven
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