Should anything close to these numbers be reached, an IPO will make Zuckerberg one of the world's richest men and many of Facebook's 3,000 employees exceedingly wealthy. span class="fullpost">
But beneath the eye-catching valuation, long-term observers of Facebook warn that an IPO carries serious risks for a company that has enjoyed executing its long-term vision of reshaping how almost 1bn people communicate and organise their lives online from the privacy of its Silicon Valley headquarters.
Facebook cannot succeed at becoming the world's main communication platform and produce the short-term results that Wall Street wants," says David Kirkpatrick, the author of a history of the company called The Facebook Effect.
"Zuckerberg has sought to delay an IPO for as long as possible."
As 2012 begins, the clock has almost stopped ticking for Facebook's 27-year old founder to delay further.
Facebook will have to disclose its financial results by the end of April to comply with a US regulation requiring any company with more than 500 shareholders to do so.
While an IPO isn't a legal requirement of disclosing results, most expect a Facebook float to follow shortly after the company opens its results up to the world.
Whatever a flotation means for Facebook's long-term future, the company's far more pressing challenge will be to execute the IPO without any hitches. That's where David Ebersman, who joined Facebook as its chief financial officer from US biotechnology company Genentech in 2009, stepped in.
The early noises suggested that a Facebook IPO would consign Wall Street banks to a supporting role at best, echoing what Google did almost a decade earlier.
Facebook isn't yet believed to have picked advisers, and Ebersman is said to have drafted the S-1 registration form, a critical document usually produced by banks, that doubles as a disclosure form for regulators and a marketing brochure for the company selling shares.
"There's a tendency in the aggregate for Silicon Valley to be sceptical and cynical about Wall Street," says Lise Buyer, who helped Google organise its IPO when she worked there and now advises companies that are going public on their relations with banks. "A banker's seal of approval can help persuade an investor but if you're Facebook you don't need that."
The muscle that Facebook brings to the table - the users themselves and revenues estimated to be close to $4bn this year - has led to predictions that Facebook might follow the example Google set in 2004 and sell shares by auction.
The idea, in part, would be to open the sale up to retail investors and sell the shares at a price that reflected true demand, rather than engineering a first day surge for those investors – who are also often clients of the banks – lucky enough to buy the shares at the IPO.
As speculation intensifies about when Facebook will file its S-1 – the moment when the public starting gun on the IPO process is fired – there would be considerable risks in completely avoiding Wall Street.
For a start, Google's flotation is not seen as an unequivocal success. Google's shares surged almost 20pc on the first day of trading, prompting accusations the auction system failed to accurately match the amount of shares sold with demand from investors.
Also, Facebook has already used banks to raise funds. In December 2010, Goldman Sachs drummed up $1bn for the company from its wealthiest clients. Even those technology bankers who believe the IPO process needs improving say you need very strong motivation to go public using a system every banker on Wall Street is hoping blows up.
"If you begin to introduce that [the auction] as a mechanism, you erode the value that Wall Street thinks it adds," said Eric Risley, who was a technology banker at Bank of America and is now a partner at boutique adviser Architect Partners in Silicon Valley. "Wall Street was very pleased that the Google auction failed."
It will be a surprise if Sheryl Sandberg, Facebook's chief operating officer, doesn't use her annual trip to the World Economic Forum at Davos at the end of the month to meet the Wall Street bankers who will also be at the gathering of business leaders in the Swiss ski resort.
The fees generated from taking technology companies public was a rare bright spot for Wall Street in 2011, with Morgan Stanley, Bank of America, JPMorgan Chase and Goldman Sachs making up the four biggest earners, according to Dealogic.
But analysts say that the flotation of video game pioneer Zynga in early December holds cautionary lessons for Facebook. Best known for the games Farmville and Cityville that are played on Facebook, Zynga's shares ended their first day down 5pc and have yet to reach the $10 mark they were sold for.
Some put the blame on Zynga trying to sell too many shares. It sold 15pc of its stock, almost double the amount offered by professional networking site Linked-In last May. LinkedIn's shares are now 40pc higher than the $45 they were first sold for.
"A busted Facebook IPO that trades underwater would seriously harm Facebook's momentum and reputation, with everyone from major advertising agencies to valuable talent Facebook wishes to hire," says Sam Hamadeh, managing director of PrivCo, a US firm that analyses privately held companies.
And should the share price still be lagging the IPO price six months later, it makes it much harder to have a follow-on offering, when early backers and employees typically sell some shares. To guard against a repeat of Zynga, Hamadeh expects an IPO to value Facebook at closer to $85bn.
For an entrepreneur who has harboured a long-term vision for Facebook since creating it while a student at Harvard University in 2004, caring how the shares perform on the first day is likely to be a compromise that Zuckerberg will have to make, should the IPO happen. And it's only one of several challenges Facebook will face in what could be a fraught process.
The greater the hype and publicity that will be showered on the process, the more eager some investors will be not to get swept up in it.
"Hype is a big issue around the internet and social media companies," said Dan Hanson, a managing director at BlackRock, an investment firm that the eventual advisers to Facebook will want to buy shares at an IPO. "My starting premise is that the numbers should tell the story. I'm more sceptical on IPOs, because there's not much history with the companies."
And there have been signs in the last couple of weeks that Facebook is trying to distance itself from the wave of internet IPOs, including that of daily deals site Groupon and Pandora Media, that stormed the Nasdaq last year and raised fears of a repeat of the 1990s dotcom bubble.
In a recent interview, Sandberg said: "We [Facebook] need to be around and thriving when Mark is old." She cited consumer goods giant Procter & Gamble as an example of a company that has existed for decades that Facebook should emulate.
Kirkpatrick believes that Facebook will be valued at $200bn by the stock market within a couple of years, but has some sympathy with those investors trying to pick the next Google and avoid the next Yahoo! in the rapidly changing internet age.
"Would I gamble that Facebook is going to be around in 100 years?" asks Kirkpatrick. "It's not the sort of company you can make projections about for more than five years out."
Observers argue Facebook's age – it's almost a decade old – already marks it out from most of the younger companies that floated last year.
But as 2012 begins, Zuckerberg and Sandberg may be just months away from confronting the central, and arguably most difficult, challenge posed by an IPO: to balance the demands of a new set of owners with those of Facebook's 800m users. (source http://www.telegraph.co.uk ) For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today
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