Following Facebook’s Feb. 1 filing for an initial public offering (IPO), University professors and alumni told The Daily the change will not affect Facebook’s daily operations, but does create potential for the company to become an even bigger resource for Stanford.
Blake Johnson, a professor of management science and engineering, said he does not believe Facebook’s financial situation will change in any material way due to the IPO because the company has been able to raise as much money as it desired in the private market.
Johnson added that although public scrutiny increases once a company becomes public, Facebook has always been under enormous amounts of public scrutiny.
“The world doesn’t change that much for Facebook,” Johnson said.
In a letter published during the IPO filing, Facebook CEO Mark Zuckerberg stated, “We don’t wake up in the morning with the primary goal of making money, but we understand that the best way to achieve our mission is to build a strong and valuable company.”
“This is how we think about our IPO as well,” Zuckerberg continued. “We’re going public for our employees and investors.”
Johnson agreed with this assessment.
“It’s to allow their employees to realize the value of their stock,” Johnson said. “That’s likely to be the bigger impact for both Facebook and Stanford.”
According to The New York Times, about 1,000 Google employees became millionaires on paper after its IPO in 2004.
“Lots and lots of people left Google, not necessarily because they were dissatisfied with Google, but [because], ‘Hey I have some money, and I’m going to start something of my own,’” Johnson said.
He added that the chances of this happening with Facebook’s employees are even higher, as a lot of people — after seeing the success of companies such as Google — went to Facebook with the knowledge this would happen.
Steve Garrity ‘04, co-founder of the social media company Hearsay Social, said he believes many students come to Stanford with the idea of starting their own company one day, calling it the “Silicon Valley dream.” Garrity said Facebook exemplifies this dream.
While the relationship between Stanford and Facebook is unlikely to change as Facebook continues its move towards becoming public, it most likely means “more growth, more jobs for Stanford students,” Garrity said.
Since its arrival to northern California, Facebook has provided jobs and internships to Stanford students.
Feross Aboukhadijeh ‘12, who interned at Facebook during the summer of 2010, said he was part of a team of five people — three employees and two interns — that worked on building a new version of Facebook groups. The project went live in October after four months of work.
“It was the coolest experience in my life up to that point,” Aboukhadijeh said. “It’s a good a way to get industry experience and learn how a well-run company does its stuff.”
“Stanford makes CS majors, and Facebook hires them,” he added.
Alex Hoffer ‘13, president of the Blyth Fund and a member of the board of Stanford Finance, wrote in an email to The Daily that, “the IPO of Facebook shows many aspiring entrepreneurs that a group of young, very bright people can create a tremendous amount of value very quickly. It’s a very inspiring story.”
“Facebook and Stanford have a long history together,” Garrity said, “and I think they’ll continue to do a lot of great things together. An IPO would just be exciting for everybody.”
“A lot of [Facebook’s] employees are young and do interesting things, and a lot of these things will involve Stanford, Stanford students and Stanford research projects,” Johnson said.