New York: Facebook Inc will focus on wooing users and developers in 2010, rather than courting investors with an initial public offering (IPO), board member Jim Breyer said.
The idea is to "galvanise the development community" around Facebook Connect, a system that lets users connect their accounts to other sites and applications, said Breyer, a managing partner at venture firm Accel Partners, which backed the company.
Facebook, the world's biggest social-networking site, is one of the most highly anticipated IPOs — with the potential to generate the kind of returns seen by Google Inc. and Cisco Systems Inc., according to Kennard Allen, a portfolio manager at T. Rowe Price Associates Inc.
Pushing a deal out beyond 2010 gives the company more time to add users, improve its product, and hire technical and business talent, Breyer said.
"We are still at the very early stages of the rise of the social web," he said.
The company has focused on maintaining growth during the economic slump, a bid to cement its dominance in social networking. Chief Executive Officer Mark Zuckerberg, who started the service as a Harvard University student in 2004, said last year that he expected the company to have an IPO, though he wasn't focused on it.
Rebound
US companies are projected to raise as much as $50 billion (Dh183 billion) through IPOs this year, more than triple the amount in 2009, when deals recovered during the biggest stock-market rally since the Great Depression, estimates from London-based Barclays Plc and Bloomberg show. The number of startup companies holding IPOs will double to 26, according to a poll of released last month by the National Venture Capital Association.
The revival in deals hasn't coincided with bigger returns for all investors. Almost 40 per cent of US IPOs in the second half of 2009 fell, while seven companies — including Kansas City, Missouri-based National Beef Inc. and Terreno Realty Corp. in San Francisco — pulled offers since the start of November, Bloomberg data show.
Fortinet Inc, the Sunnyvale, California-based maker of all-in-one network-security equipment, has surged 46 per cent since becoming the first Silicon Valley startup to go public in almost two years in November.
Russia's Digital Sky Technologies pumped $200 million into Facebook last year, valuing the company at $10 billion. Digital Sky also agreed to buy $100 million of Facebook stock from current and former employees. That provided a way to reward workers without an IPO.
Facebook, located near Accel in Palo Alto, California, has more than 350 million active users. The company said in September that it was generating positive cash flow, reaching that point earlier than expected.
News Corp.'s MySpace and San Francisco-based Twitter Inc. rank second and third to Facebook in US social-networking users, according to Reston, Virginia-based ComScore Inc.
Twitter recently played down the idea of having an IPO soon. That company's CEO Dick Costolo, said this month that an offering was still "way out."
