Goldman Sachs' old-school Facebook deal brings a new set of challenges. The bank is raising up to $1.5 billion from clients to invest in the social network while putting in $450 million itself. Like Morgan Stanley's reported deal with online coupon service Groupon, it looks like classic merchant banking. With hot firms in the driver's seat, however, the banks could find themselves in for a wild ride.
The Great Debate UK
By Robert Cyran and Rob Cox
Facebook may at last become a real, rather than virtual, money spinner in 2011. The social network doesn't need capital to grow, but expectations from backers and employees for an IPO are too high for founder Mark Zuckerberg to ignore. There's just one challenge: trading in Facebook's unlisted shares values the website at more than $40 billion. Getting to that number requires some astonishing growth assumptions.
2010 is a great time for the web. Innovation is thriving as new services and content flourish on smartphones and laptops, thanks in good part to industry leaders like Apple and Facebook.
Witness the power of Facebook. About a month ago, one of the social networking site's users set up a discussion forum entitled "No I will not pay $3.98 a month to use Facebook as of July 10th 2010!" Within a few weeks, more than 825,000 people joined his page. Trouble is the whole thing was based on a faulty premise: Facebook has no such intention to charge.
Skype looks like Silicon Valley's best hope for a blockbuster initial stock offering in 2010. With Facebook determined to stay private until next year, the former eBay orphan could steal the scene with a quick flip. Moreover, as a result of clarifying copyright issues and rewriting its code to attack the business market, the company may be worth twice its $2.75 billion price tag when eBay sold all but 30 percent of its stake last year.
The debate over freedom of expression and the impact of social networking on democratic rights in the courts is in focus in Canada after a Facebook group became the centre of controversy when it may have violated a publication ban.