Facebook launches with humble beginnings that most people have seen dramatized in The Social Network by now. It was a small social site backed by only a little money, and limited just to the undergrads at Harvard. Right out of the gate, Facebook turned down offers from an unknown investor and Friendster, each offering $10 million. This was, of course, when the company was still called TheFacebook.
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Facebook became more legitimized as it moved into more colleges, and then expanded to the public. Microsoft signed a large advertising deal with Facebook, an event that began a long, positive relationship between the two companies.
Just a month later, Yahoo made a $1 billion offer to buy Facebook, but it was rebuffed after Yahoo’s stock dropped and the company had to lower to $800 million.
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After a lucrative advertising relationship, Microsoft invests heavily in Facebook, putting in $240 millionfor 1.6% stake in the company. This raised Facebook’s estimated worth to $15 billion, after only three years of existence. Despite this, Zuckerberg said the possibility of an IPO is “years out.”
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In an interview with 60 Minutes in January, Mark Zuckerberg said there was no chance of a Facebook IPO that year. In August, Facebook gave itself a valuation of $4 billion, then began letting fully vested employees sell 20% of their stock based on that valuation.
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Facebook gets $200 million investment from Russian Digital Sky, who bought 1.96% of the company with that. That investment raised Facebook’s valuation to $10 billion.
Two other estimates of wealth came out later in 2009 that lowered Facebook’s valuation, probably as more terms of the deal with Digital Sky became clear.
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Zuckerberg is still coy about an IPO, saying there is “no rush,” and proving that Facebook doesn’t need the money.
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Trading on secondary markets suggests Facebook is the third most valuable web company in the United States. As private investors sold their stakes, valuations of the company soared as high as $56 billion.
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Goldman Sachs and Digital Sky Technologies drop a massive $500 million cash infusion into Facebook, pushing its value upwards of $50 billion. According to USA Today, that valuation exceeds companies like eBay and Nike.
Facebook also launches an $1.5 billion equity offering through Goldman Sachs, letting some private investors buy a piece of Facebook.
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Reports circulate that Facebook’s IPO could exceed $100 billion, and that it might go public during the first quarter of 2012.
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Facebook halted trading of its shares in secondary markets for three days starting Jan. 25, a possible indicator the company’s long-awaited IPO is coming soon.
The signs were correct, as Facebook announced its IPO on Feb. 1, ending the stream of speculation.
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Facebook announced it was purchasing popular photo-sharing service Instagram for $1 billion in April. The deal was reportedly brokered by Zuckerberg himself, and was a major acquisition for the company.
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Facebook is set to go public May 18, and the IPO could raise $90 to $104 billion. No one can be sure until trading closes though.
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