How IPO May Affect Cloud Services World

By Chris Preimesberger  |  Posted 2012-02-01 Print this article Print


The effect of Facebook going public will impact a growing number of companies that depend on the reach of the social network. Zynga, for example, which operates a large number of the peer-to-peer social games on Facebook, provides about 12 percent of Facebook's revenue. Zynga has been highly successful for several years before it went out with its own IPO in December.

Yammer CEO David Sacks told eWEEK that the IPO "validates what the trend has been for several years now and what we really believe, which is that everybody's going to have a social networking account of some kind. One of the downstream effects for us is that we think that employees will want to communicate in this way at work, and not just in their personal life."

Yammer provides a secure Facebook-like social network for use inside enterprises.

Facebook's IPO might not have all that much impact on Yammer, which is already growing fast on its own.

"Sales have tripled (in the last year), and our user base has grown from 1.5 million users to 4 million users, so it's been rapid growth," Sacks said. "It's actually the same growth rate as LinkedIn in its early years; they now have about 100 million users. It's the same sort of trajectory."

GraphEffect, which makes software for Fortune 500 companies to manage their social network advertising, was one of the first companies to beta-test Facebook's ad technology. 

Talking about the "knock-on effects of the 'Facebook economy'," CEO James Borow said in an email that "there are thousands of companies (GraphEffect is but one) that are dependent upon FB for their own growth. Facebook is expected to invest more in the tools they use to let other companies connect to them, and that will drive both FB's growth and the advertising industry's."

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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