Facebook hires new finance boss in possible IPO move
Appointment of ex YouTube finance chief as new chief financial officer points to preparation for a stock market listing and comes as CEO faces legal challenge for stealing code.
Social networking site Facebook has appointed former YouTube chief financial officer Gideon Yu as its new financial chief, the latest hint that the site is preparing for a potential initial public offering (IPO) or other major cash injection.
Facebook, which has so far rebuffed potential acquirers in favour of independence, did not disclose the reasons why previous chief financial officer Mike Sheridan, a veteran Silicon Valley executive, was leaving.
Facebook officials declined to comment on the changes.
The company, which was started in 2004 by then-undergraduate Mark Zuckerberg, now 23, as a social site for fellow Harvard University students, has opened up over the past year to users of all ages. It now has 32 million active members, up from 24 million less than two months earlier.
Prior to joining YouTube, Yu was treasurer of Yahoo.
Earlier this month, Facebook named Chamath Palihapitiya, 30 an investor with venture capital firm Mayfield Fund, as Facebook's vice president of product marketing and operations. Prior to joining Mayfield in 2005, Palihapitiya was general manager of AOL's AIM and ICQ instant messaging businesses.
"The anticipation is either that it's going to be a takeover target bigger than YouTube or that its going to have a hot IPO like Google," said Greg Sterling, an analyst with Sterling Market Intelligence.
Facebook is the largest independent player at the centre of the internet industry's hottest trend -- the shift to mini web applications known as "widgets" which consumers can choose to add to their own sites.
Two weeks ago, Facebook board member and financial backer Jim Breyer, a partner at venture capital firm Accel Partners, said the company would do well over $100 million in revenue in 2007, turn a profit, and have significant positive cash flow.
At that time, Breyer sought to knock down increasingly wild rumours that the company may be for sale - with recent speculation centred on Microsoft which web pundits said might be considering a $6 billion (3 billion) offer for Facebook.
In the past it has fended off lower bids from Yahoo and Viacom.
"We continue to focus on building the best stand-alone company we can, and simply said, are not for sale," Breyer said.
Instead, sources close to the company say Facebook is looking to build toward an eventual floatation.
One hurdle it faces before it can realistically peruse a stock market listing is a lawsuit that accuses Mark Zuckerberg, the 23-year-old founder of Facebook of stealing the idea from fellow students at Harvard.
Zuckerberg is being for sued for stealing the source code - and design - of Facebook from ConnectU.com, a similar, university-based social network which he worked for briefly as a programmer four years ago.
The case goes before a district court in Boston, Massachusetts later today. Zuckerberg denies any wrongdoing, and has asked that the case be dismissed.
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