The Implications of Facebook’s IPO on Social Media & Internet Marketing

Posted: Jul 29, 2012
Author: WordJack Media

Facebook, the social media giant, went public on May 18, 2012. That means that anyone who wants to and has enough money can now literally own a piece of Facebook—arguably the most popular company on the planet. Mark Zuckerberg, Facebook founder, still owns 28% of the stock in the company, while the rest is now owned by employees, investors, and other individuals across the country.

When Facebook opened on Wall Street with an IPO (initial public offering), about 82 million shares were traded within the first 30 seconds. ThisIPO quickly boosted Facebook’s revenue to $16 billion. However, the IPO price of $38 per share turned out to be too high, and the second day of trading saw a decrease in revenue.While prices have fluctuated a lot in the weeks following the IPO, the offering is still being deemed as an overall success.

So why should you care? What impact will Facebook’s IPO have on social media and internet marketing in general?

When Facebook was a private company (meaning all the shares were owned by Mark Zuckerberg and other investors and employees), they didn’t have to answer to anyone for their decisions, but now they’ve got thousands of investors that they need to keep happy. That means they will need to create more money-making opportunities by expanding their online advertising program.

Social media is now much more than adding “friends,” posting pictures, and “liking” status updates. Facebook’s IPO has proven that social media can succeed in the business world through paid advertisements, which means we will very likely see an increase in social media and internet marketing among businesses of all sizes.

So what does this mean for you and your small business?

Via Facebook and other social media sites like Twitter, Google +, and Pinterest, businesses can easily adapt to new trends and cater to their current and potential customers’ wants and needs. With groups, status updates, links, pictures, videos, and the new timeline feature, Facebook users can receive tons of information about your company with just a few clicks of their mouse. However, even if you have 100k “likes” on Facebook, it won’t do any good if you can’t convert any of the people into paying customers. Because paid advertisements can be tailored to individual users’ interests, this aspect of social media makes finding customers who are most likely to convert their social media following into a sale even easier.

Bottom line: Should you buy a piece of Facebook on the stock market? Maybe, maybe not. But the most important thing that the Facebook IPO teaches small businesses about internet marketing is that you shouldn’t wait to get involved in “socially” marketing your business. Each and every business should take full advantage of its resources. With advertising opportunities in abundance (of both the free and paid varieties), your business could fall behind in a matter of minutes if you’re not on board. There are over 800 million potential customers at your fingertips, so what are you waiting for?