Facebook set for $100bn valuation in IPO next spring

Facebook is gearing up for an initial public offering (IPO) in the second quarter of 2012 that could value the company at $100bn, according to reports.

Rumours that Facebook will file for an IPO have been circulating for some time, but the world's largest social network has never publically confirmed the move.

Facebook told V3 on Tuesday that it could not confirm the most recent rumours. The first reports originated in The Wall Street Journal and cited "people familiar with the matter".

Goldman Sachs and Digital Sky Technologies publically invested $500m in Facebook in January, which valued the social network at $50bn.

Quocirca analyst Clive Longbottom suggested that Facebook will have no problems raising $100bn in an IPO. The sum is equivalent to the revenue generated last year by IBM, the world's biggest software company.

Longbottom pointed out that Facebook will need to sell only a small percentage of stock to achieve the reported valuation.

"All things considered, I expect the IPO will be successful. Social networking is seen as a safe bet for investors, just as telecoms companies used to be," he said.

"The IPO will bring a lot of money into Facebook which the business will then have to decide what to do with."

However, Longbottom warned that the money could do the company more harm than good.

"Facebook may decide to use the money to develop its market share in particular regions of the world, but then it already has 10 per cent of the global population using its service," he said.

"Or it may try and develop a monitised business, which it has been trying to do for a while but has been unsuccessful. It may also try and expand into a software-as-a-service type of company like Google has done with products like Docs, although this may take it off path and remove some of its focus."