2 Predictions for Social Networks in 2011

1.NO Facebook IPO in 2011



There have been countless rumors about a Facebook IPO since 2007. The media has been waiting with baited breath for the day that Mark Zuckerberg cashes in on his baby and turns his company public.

I’m here to tell the media: Don’t hold your breath.



I could create a list of reasons the size of an SUV why Facebook and its billionaire leader aren’t going to be raising money on the public markets. Here are just a few of them:

* Mark Zuckerberg is famously uninterested in money. He believes in delayed gratification and has lived in a modest home for years — he’s the opposite of the far more extravagant Larry Ellison, co-founder and CEO of Oracle. In other words, he’s in no rush for a big payday.

* Secondary markets like Sharespost have changed the game for cashing out on investments. In the past, VCs needed to cash out on their investments by acquisition or IPO, but as Accel Partners proved last month, VCs no longer need an IPO to do so.

* Zuckerberg sees no strategic advantage to an IPO. In fact, it’s just a lot more paperwork, headaches and scrutiny. He’d love to delay that as long as possible.

* Facebook doesn’t believe it’s ready for an IPO: “Facebook would benefit from another year of growth absent the added scrutiny that comes with a public listing,” Business Week reported earlier this year.



The result is that there won’t be a Facebook IPO in 2011. So long as the company’s growth metrics are strong, Facebook has no need for the public markets. When it hits its saturation point though, that’s when you should expect the social network to make its move. I predict that will happen in 2012.



2.Twitter Has a Very Boring 2011

Sure, Twitter will launch new features, and senior execs will continue to step down and new people will take their place, but that’s what happens to any maturing business. Now that Twitter has new funding, has launched its ad platform and has launched a complete redesign, is there an earth-shattering event that could take us by surprise?



I don’t discount it; I just don’t predict there will be one. An IPO makes no sense with the new round of funding. A redesign isn’t necessary. Really, Twitter is focused on its ad platform and will launch features that enhance it. Twitter will slowly continue to grow, but I don’t expect Facebook-like hockey stick growth.

In 2011, Twitter is going to be one of the most boring social media services around. And I know the Twitter team is just fine with that.