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Facebook preps for IPO

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Kai Ryssdal: Like a lot of Internet startups, Facebook used to be scrappy. Anti-establishment. The kind of place where you could work in your pajamas, if you wanted to.

OK, that was a long time ago. Six hundred million members and billions of dollars in valuation ago. But if somehow there was any doubt left that Facebook has become part of the corporate establishment, the New York Times pretty much put it to rest today. The Times says Facebook is courting former White House press secretary, Robert Gibbs, to come onboard — a big signal that Facebook could be getting ready to go public.

Our New York bureau chief Heidi Moore reports.

Heidi Moore: Robert Gibbs hasn’t changed his Facebook status to ‘new employee with giant stock options.’ Not yet anyway. But Peter Falvey, an investment banker with Morgan Keegan, says the Gibbs rumors could be a sign that Facebook is ready for big changes.

Peter Falvey: They’ve absolutely been downplaying the immediacy of the IPO. This would be a significant step on their way.

And a step towards repairing Facebook’s controversial public image, especially about privacy concerns.

Here’s Paul Kedrosky; he helps fund tech startups.

Paul Kedrosky: The thing that Facebook is most notorious for is being somewhat tone-deaf in their public relations.

Facebook declined to comment on Gibbs, who had plans to work on President Obama’s re-election campaign. Last week, Facebook hired another PR veteran, Caryn Mooney. And filling its ranks with other talent is bound to get even easier if an IPO is in the works.

Kedrosky: They have the hottest currency in the land. When you’re competing against a hot currency like Facebook equity, it’s very difficult to compensate with cash. It’s creating this great sucking sound in Silicon Valley as engineers get sucked into the vortex by this hot equity.

But Falvey says Facebook has also helped other tech companies by drawing more money to the sector. And he says Facebook still faces a lot of pressure to keep growing at a rapid pace.

Falvey: Everybody is assuming it’s a fait accompli that Facebook will be a giant company 10 years from now — and all signs point to that could be the case — but there’s going to be a lot between here and there.

At least now, everyone knows to prepare.

In New York, I’m Heidi Moore for Marketplace.

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