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Category: SocialMedia

Facebook and Google on IPO

Written on January 11, 2011 by Japhet Writ

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The similarity between Google and Facebook is that the former didn’t want too much oversight or influence on its management by outsiders, and clearly, the latter wants the same deal.

Search engine giant, , and the most popular social networking site, , has something in common when it comes to . Both Facebook and Google didn’t want too much influence from outsiders when it comes to their management. From the start, it was clear that Google wanted the money but not the oversight that comes with being a public company. In a similar way, Facebook with its Goldman deal,  wants to raise capital from investors and avoid influence of their management.

However, Searchblog’s John Battelle believes that Facebook must be made accountable to the public. He pointed out that a company that stores a tad full of private data, must enable the public to review its practices and finances. In addition to this, Facebook must allow the people to question its intentions in a way that is supported by collective and legally codified will.

Though it is good point, Facebook is intent in keeping a limit with its accountability. Hence, they are using the Goldman deal to avoid the regulations that requires them to IPO. As of the moment, Facebook is holding all its cards and they are not giving them up without a fight. By keeping its financial performance a secret, the social networking site makes it tough for competitors to outdone them. Facebook gets to raise a considerable amount of capital without revealing any information — making it a competitive advantage. Unfortunately, regulators came in to plug a huge loophole.

Should Facebook really be made accountable to the public? Share your opinions by leaving a comment.

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