Social Networking has been making itself known at a consistent pace in the Stock Market. Last year LinkedIn made its entrance on this stage in May and Groupon followed suit in November. Now it’s Facebook’s turn. The furor stirred up over these IPO’s only goes to show the importance of social networking in today’s world. As businessman and founder of the Success Motivation Institute, Paul J. Meyer said, “Communication – the human connection – is the key to personal and career success.” It also seems to bode success on Wall Street.

When a novice to the Financial World hears Facebook is going public, this novice would naturally scratch his head. Everyone, except perhaps those living quite happily under a rock or equally happily in a world without technology, knows about Facebook. It is estimated that this August Facebook will pass the 1 billion user mark, which means 14.3% of the global population this number is close to that of 1/5^th of the world population when you consider that 26.3% of the world’s population is under the age of 15 and exiled from Facebook. (15 was chosen as a marker because Facebook requires one to be 13 or older to have an account combined with a good percentage of parents that won’t allow their kids to be on Facebook until they reach 16.)

Is it any wonder that the Facebook IPO is projected to raise $10Bil. To bring this amount down to a number more comprehensible $10Bil = $2,267.24 from each person in the U.S., even the little bitty babies who don’t have piggy banks yet.

Will they get their $10Bil? I won’t speculate. I will offer an answer to the question “Why would they get it?” Well, the triangle is known as the strongest form to build in as demonstrated by the Pyramids, and there are three strong reasons that when combined predict that Facebook is a solid bet as an IPO.

1. Sheer Magnitude

As stated above Facebook has major numbers on its user front. Facebook claims that these are “active” users, and that over half of them use Facebook “in any given day.” Also the average user is highly connected to other users and entities with an average friend count of 130.

2. Sit Down and Spend Some Time

In a month, the average Facebook user in the U.S.A. whiles away seven hours and 45 minutes on Facebook. YouTube clocks in at less than two hours a month and so does Google.  Facebook is a destination. More people go there than to almost any other site, and they stay there.

3. Baby I’m Stuck On You

Facebook’s forebears Friendster and MySpace were devastated by the Seven Year Itch (and the itch didn’t even take 7 years) when their users drifted off to younger social networking sites. Facebook launched 8 years ago and is still going like gangbusters; it continues to expand its demographic reach. According to the Pew American Life Project growth of young users has slowed – but is still growing, and there is a rapid growth among adults over 50. Facebook connects families as well as friends as well as co-workers. Facebook has become part of the modern lifestyle. It’s not easy to go bye-bye.  If you go your own way, you go it alone. The more people (real connections) you are linked to on Facebook, the more difficult it is to leave.

What will be the fallout of Facebook’s IPO, besides those buying in and hoping for mega returns?

Well going “Public” says it all. User’s privacy maybe and probably will be somewhat of a casualty as Facebook is dissected by analysts to see how to increase its bottom line. The best way to do this is by more targeted advertising.

Catherine Tucker, a marketing and IT professor at MIT’s Sloan School of Management, expects Facebook to ramp up what she calls “social advertising” efforts, where ads are served up to users based on their friends’ preferences. For instance, if I “Like” Whole Foods on Facebook, you, as my friend, are presumed to harbor a preference for organic food as well – hence you are more likely to see a Whole Foods advertisement when you log on.

Facebook, granted, is the most well known Social Networking site, but there are other options out there. If privacy is an important issue and there is a desire to network in a more structured forum, such sites as Madison Who’s Who provide a more tailored and exclusive social networking experience.

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