What? Facebook initial public offering (IPO) delayed until September 2012.
So what? According to the Financial Times, the firm, which is reckoned to be worth more than $100 billion, has delayed its IPO because Mark Zuckerberg is worried that cash rich workers will not focus on product development (see, for example, the Financial Times).
But there are other factors at play here. Last month, consumer internet companies Groupon and Zynga also postponed plans to go public. As we reported then, if a company feels investor confidence levels are low, it makes sense to hold off on roadshows and other pre-IPO hype until market conditions (or at least perceived conditions) improve.
Groupon, Zynga and Facebook, to name but a few in this space, won't be making rash decisions during a time of uncertainty. They've missed the LinkedIn euphoria, so will have to wait until conditions stabilise. We may also be seeing some sector altruism at play here – a high-profile but underwhelming float would damage the sector much more than a delayed but ultimately successful float.
With stiff competition from Google+ and rumours that Facebook has reached its saturation point, there is more need than ever for Facebook to focus on product development. The outcome of the clash of the social network titans will be key to deciding float timings.
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