Facebook continues with its non business and anti-profit activities, ahead of the planned in May IPO. Spending money on acquisitions and patents and issuing shares for some of the purchases influences the potential price at IPO in down direction. There is no stable economic and business model factors that can guarantee the expected at the IPO evaluation of the company at $75-100 billion. With buying Instagram and patents from AOL the company worsens this situation and highlights further the question of what exactly the investor will buy at the IPO. The expected price is at the record 25 times of yearly income with the profit even smaller and not guaranteed in future. As a site and a number of visitors Facebook is great, but as a business model it is funny. In past we have seen much sites with high traffic and bad business model. Even now we can see the fate of Yahoo that sometimes was a super project with a dreamy super future. Mark Zuckerberg obviously is a technology genius but a very doubtful manager and salesman. Facebook has no a strategic advantage, and at the same time the competition is accelerating (Google+ goes very well). So in fact it is not logical to expect a super successful IPO. But this does not mean that Zuckerberg will not take the investor's money. These days the market is not very logical or pragmatic.

Dobri
April 24th 2012