What Facebook's IPO offering means to you

TAMPA - If you're not an investor, you may not care about the announcement that Facebook has launched an initial public offering. But you should.

It's inevitable that once an IPO is announced, changes to a company follow. For instance, after LinkedIn's IPO, more ads began popping up on the site, and the company launched LinkedIn Today and other efforts to increase the amount of time users spent on the site.

So what changes might you see on Facebook now that the company has shareholders to keep happy?

First of all, you can expect that your information – everything from your job title to the songs you "like" your friend listening to on Spotify – is part of the product that Facebook is selling. In an interview, Facebook Vice President of Product Chris Cox said, "The challenge of the information age is what to do with it."

So far, Facebook has used that information to shape the advertisements that users see. For instance, a newly engaged woman will start seeing ads for wedding vendors. A single man will start seeing dating services. Looked up a handbag on a website? You may see that exact handbag on the site soon enough.

Your friends' interests are for sale, as well. If your friend has liked Target, for instance, you could start seeing ads for Target – along with your friend's penchant for the store – in your news feed.

The Sydney Morning Herald shares what is expected to become a larger part of Facebook's income: the sale of virtual and real goods. "While advertising is its bread and butter, Facebook has sought new sources of income by becoming a place where a variety of goods and services are bought and sold, whether it is virtual farm animals or real concert tickets," it reported today.

Facebook already gets a cut of income from popular Facebook Games, which may be why the service has launched the "Apps and Games" feed just in time for the IPO announcement. This feed makes applications and games – that sell real and virtual goods for actual cash – more prominent and social, giving users an additional reason to click the "purchase" button.

Print this article Back to Top

Comments