At last, the IPO that the investment world has been awaiting with varying degrees of impatience appears likely to make its debut. And if those who have had an early peek at Facebook’s pending IPO filing are right, the deal could value the social networking giant at $100 billion – more than four times the valuation that Google (GOOG) commanded during when it went public not quite a decade ago.
But while there will be a lot of buzz surrounding Facebook as the road show gets underway and eager investment bankers talk up the company’s unparalleled ability to bring people together – have dinner! Organize a high school reunion! Plan a revolution in the Middle East! – it’s important not to forget that what is more important than where Facebook has been is where it is going next. How much more room is there for the company – already ubiquitous among even Internet novices in their 70s and 80s – to generate the kind of outsize growth in revenues and profits that investors will expect in exchange for the premium valuation it is seeking? Unlike another iconic brand,Apple (AAPL), Facebook doesn’t manufacture a tangible item that can be purchased, so its growth will rely on its ability to generate a different kind of growth and produce earnings from different kinds of places.