Justin Fox has a good post on why Facebook doesn't want to go public and whether that tells us something "interesting and disturbing about the current state of public financial markets." And it probably does. But it also tells us something interesting and disturbing about Facebook.
The way they've structured the deal with Goldman Sachs is that Goldman will gather together many investors in one vehicle. That way, the company, which will have many more than 500 people owning shares, will not technically have 500 people owning shares, and thus won't be regulated as a public company. In other words, Facebook wants the benefits of going public without the various burdens.
It's hard not to see this in terms of some of the company's more ruthless moves, like wiping out different layers of default privacy protections in ways that most users were never going to understand but could've been actively harmed by. That's not breaking any rules, exactly, but it's bending them pretty aggressively. So too with this effort, which is, somewhat ironically, an attempt to keep the company's internal figures private.
History is littered with companies that were aggressive in service of growth and profits. You can't really fault Facebook for that. But Facebook is a bit of an odd company, in that its business model essentially boils down to "trust us with your online life, and many of the details of your offline life." And I can't think of anything Facebook has done in recent years that has given me cause to trust it more, rather than less.
| January 6, 2011; 3:26 PM ET
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