[101010010101]

In your opinion, do you think they should proceed with an IPO even if they have yet to "figure out a better way to monetise their audience"?

Perhaps the key word is "better".

[viscanti]

Better for whom? They'll have trouble justifying their valuation indefinitely, which normally would mean that they're better off going public sooner rather than later. But Facebook stock seems to be a rather liquid investment right now on the Secondary Market. So for the average employee or investor, they can pretty much get out whenever they'd like, mitigating one of the big benefits of going public.

For FB as a company, they're probably better off delaying their IPO as long as they can. As a private company, they don't have to make their books public, and can continue to "figure it out" without extra scrutiny. Delaying the IPO also lets them promote themselves as a pre-IPO "startup", while I don't personally see the growth potential, and I think they've got a lot to do to even meet their current valuation, it could help sway some developers. They've got a long way to go to justify their valuation, and they can use all the developer talent they can get, so any little thing can help.

[101010010101]

Thanks. Should FB have to justify their pre-IPO valuation(s) or should that be the responsibility of the investment firms and individual investors who have set it?

[viscanti]

FB doesn't need to justify their valuation. They didn't set it. It's unfortunate that it's so high. I think their valuation is a weight around their necks. They're expected to "figure it out", and eventually justify it, and it's a lot of extra noise they'd probably be better off without. What they're looking to do (and what they have the potential to do) is very ambitious. Extra expectations make it even more difficult.