Columbia Business School Faculty Comment on Facebook IPO

Faculty members shared their thoughts on Facebook's IPO leading up to Friday's opening bell where Facebook (FB) traded for the first time at $38 per share.

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  1. Professor Rita McGrath talked with the Christian Science Monitor about Facebook's business model for the future, in terms of the quality of its advertising.

    “Facebook will never be able to monetize its reach and access if it can’t raise the game on the quality of advertising on the site,” McGrath said. As a business consultant, she added, “I get weirded out when I get ads [such as]: 'Female consultant? Click here to learn the 7 secrets of ...,' or, worse yet, 'Are you a woman business owner?'”
  2. Meanwhile, Professor Katherine Phillips sat down with Reuters TV to discuss Facebook's IPO and the company's meteoric rise, ahead of Friday's opening bell.

    Phillips said, "Facebook is the first media company of its kind and the only media company of its kind that has been so successful. It's a meteoric rise to success I think that is unprecedented with organizations in any domain really."
  3. McGrath also joined the New York Times’ Business Day Live to discuss Facebook CEO Mark Zuckerberg’s management style. 

    “He’s been one of the more failure tolerant CEOs that I know of, and that’s a good thing. The bad thing is that some of those failures were pretty bad.”
  4. In the Wall Street Journal, Professor Brett Gordon commented on the surging technology stock market in light of Facebook's IPO filing. 

    "Investors appear to be betting that Facebook thinks the market will rise more and would be interested in getting in on other social media firms before the market would eventually peak at some point,” Gordon said.

  5. When Facebook filed their IPO in February, McGrath talked with PC Magazine about the partnership between Facebook and social gaming giant Zynga.

    "The most powerful relationships between partners are when both parties have considerable power and there is low potential for conflict, which has certainly been the case with Facebook and Zynga so far," McGrath said.
  6. Also in February, Professor Brett Gordon spoke to The Daily after Facebook's S-1 filing about the valuation of its IPO.

    "Companies generally go public when they believe the world-at-large places the highest possible value on the firm. If you look at it from that perspective, I could certainly imagine this being overvalued,” Gordon said.
  7. In the Wall Street Journal, Professor Morten Sorensen discussed the potential for returns on venture capital investments, ahead of Facebook's IPO filing.

    "Some venture investors reaped returns of around 300 times in the late 1990s dot-com boom from then-highfliers like online grocer Webvan Inc., but Facebook is set to be the highest return I've ever seen," Sorensen said. 
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