Facebook, a popular social networking site, filed for an initial public offering on Feb. 1. However, students interviewed by The Dartmouth said they do not foresee a change in their Facebook usage once the company goes public. Professors from Dartmouth’s Tuck School of Business agreed that the new status of Facebook will not affect usage, but emphasized that it would not be a wise investment.
Although it is not clear where Facebook will be traded, the company plans to use the symbol “FB” and has filed for an IPO of $85 to 100 billion, hinting at the extraordinary size of the formerly secretive company, according to Forbes.
Since its founding in 2004, Facebook’s popularity has grown exponentially, with users currently numbering around 850 million. The company receives most of its revenue — about 85 percent in 2011 — from advertising, according to Bloomberg.
Despite the hype surrounding Facebook’s IPO, Tuck professors said they do not project the company to be a smart investment for everyday investors. Most of Facebook is owned by its founders and venture capitalists who invested in the company in its early days, Tuck finance professor Anant Sundaram said.
“Users of Facebook are likely to form an extremely small portion of the company at very high prices,” Sundaram said.
Facebook’s transition to a public company is not projected to change the way everyday users interact with the social media website, according to Sundaram.
Dartmouth students interviewed by The Dartmouth said they generally believe Facebook’s status as a private or public company will not affect how they use the website.
“I’m not really worried about it,” Shoshana Silverstein said. “For the moment, I don’t see it having much of an effect on me.”
Although Facebook users are not directly impacted by Facebook’s decision to go public, it has potential implications for Facebook as a company. Eric Johnson, a Tuck professor and the director of the Glassmeyer/McNamee Center for Digital Strategies, said he expects Facebook’s transition to a public company to put more pressure on Facebook’s business model.
“If you look at what they’re being valued at now, they’re going to have to own a huge chunk of world advertising within a short period of time to make that really work,” Johnson said.
Facebook is firmly entrenched in the everyday lives of millions of Americans, but there is speculation that Facebook is on the decline, Johnson said. He said Facebook is no longer as popular as it once was, wi†h younger technology start-ups, such as Tumblr, attracting a large portion of the younger generation.
“In some ways, Facebook is already less cool than five years ago, so for all the people bailing out on Facebook for Tumblr, I think it will push more people in that direction,” he said.
However, Paul Argenti, Dartmouth corporate communication professor, disagreed that Facebook is declining in popularity. He noted that Facebook has a “pretty big head start” over other popular social media sites.
“It’d be hard to do — they have a pretty large customer base,” Argenti said. “They’ve already grown like crazy, so the growth curve is certainly not finished.” He added that there is still a large opportunity for growth outside of the U.S.
While Facebook is certainly dominant, it does not have a monopoly on social networking, he said, citing Twitter as a compelling competitor.
Currently, Facebook remains highly visible and widely-used, making it the most popular social network in the nation. Dartmouth students said they generally use it to keep in touch with friends at home and at the College.
Aaron Cappelli noted that he uses Facebook for “procrastination” and checking on the status of his friends.
Facebook is also considered a useful networking tool by Dartmouth students.
“I’m trying to shift from using Facebook socially to using it professionally, so that means cleaning up my profile so I can network,” Dave Seliger ’12 said.
Most students plan to continue using Facebook in the future and do not see any real competitors for Facebook’s niche. Marty Gatens ’15 said that he plans to continue to use Facebook “until I don’t have friends anymore.”
Despite Facebook’s popularity on campus, some members of the community reject using it.
“I know next to nothing about Facebook,” Hugh Danilack said. “I don’t have it; I don’t use it; I never got into it; I don’t like it.”
He added that people waste time on Facebook and that it “consumes their lives.”