Why Facebook May Delay its IPO

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Facebook probably won’t be a publicly-traded company until 2012, despite its huge popularity, according to analysts and investors.

Analysts speculate that Facebook still needs to boost sales and gain users on its social networking site, and 26-year-old CEO Mark Zuckerberg has to gain a bit more experience before individuals can start clamoring for the stock, according to Bloomberg News.

For avid Facebook users, that could mean that gripes about the site’s privacy and functionality may not be addressed until the influence of company shareholders holds significant sway in company decision making.

Analysts previously expected the company to go public in some time in 2011. Bloomberg notes that putting the initial public offering off for an extra year also puts off added public scrutiny.

Prospective buyers of Facebook shares are likely to be Facebook users themselves, and when the company goes public, it’s more likely to be at the mercy of shareholders, who can push the company’s stock price down by selling if they’re unhappy with the company’s business strategy.

Facebook has been criticized for its handling of users’ personal information after integrating itself with 50,000 separate websites and for making it impossible for members to prevent advertisers from accessing their information, as MainStreet previously reported.

In early 2009, analysts said that the company already missed a golden opportunity to go public, as MainStreet’s sister site TheStreet noted last year. At that time, the company was valued at about $15 billion.

Currently, Facebook is worth about $25 billion, notes The Market Financial, and the company says it has more than 500 million active users. The company’s annual revenue is estimated at about $800 million, according to TheStreet.

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