Dumb it down

Facebook has decided that enough is enough. It's going to start doing business with the big boys and float on the stock market. But, will this affect us poor lowly users?

What's the deal with the IPO thingy?

An IPO is where a company floats itself on the stock market. An Initial Public Offering allows investors to buy share through the stock market. This, however, means that there could now be a difference between the original ethos of the site, which has been designed for users benefit, and the wishes of the shareholders.

Facebook wants to raise $5 billion dollars in its IPO and if that transpires it will be the biggest internet IPO ever. It would be three times bigger than when Google floated in 2004.

Why is Facebook worth that much?

Well, some say it's not actually. Last year Facebook made a profit of $668 million with total revenue generated of $3.7 billion. So maybe, maybe not.

But, thousands of jobs now depend on the biggest social network and its users. The worldwide reach of Facebook, which advertisers love, is probably why it is being valued so highly. There are currently 800 million active users on the site. If that was the population of a country it would be the third largest in the world after India and China.

Will this affect me in any way whatsoever?

It might. You see, from an advertiser's, and possibly the new shareholder, perspective  there's a problem with Facebook's advertising. We may all think those targeted ads are annoying, but they could be a hell of a lot more so. Facebook currently doesn't give much prominence to ads, but it could be pressured to in an effort to make more money.

The ads on the site at the moment are placed there by advertisers for a fee. The success of those ads are judged by the number of people clicking on them, which on Facebook is traditionally a low percentage of users.

Are the poor plebs doing all the work at Facebook going to benefit from this.

Well, yeas and no. More than a 1,000 of Facebook's 3,200 workforce will become millionaires. Seems a bit of an arbitrary number, but those 1,000 are the company's earliest employees, the one that got in on the ground floor.

Mark Zuckerberg will be royally flushed after Facebook float as he's controls 24 per cent of the company. Another two of the founder will split 11 per cent.

Sean Parker, the founder of Napster, and Peter Thiel the Paypal founder will also benefit nicely, sharing 7 per cent of the returns between them.