By most accounts, Facebook’s IPO should raise $10 billion. What will FBOK do with its part of all that cash? The same thing Google (NASDAQ:GOOG) has been doing. Buying up other companies to build up its ecosystem to ensure its longevity as well as assure investors that it is not a one trick pony. Google, several years ago, acquired several companies such as YouTube and DoubleClick and about a hundred more companies. What’s more interesting is that FBOK will force Google, Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and maybe even Yahoo! (NASDAQ:YHOO) to step up their game. And that will mean nothing more than them acquiring other Internet companies.
Here are a few targets for Facebook and for the above named companies for that matter:
- Renren (NYSE:RENN): The Chinese social networking site makes for an attractive acquisition as it would give FBOK an entry into the fast growing and lucrative China market. The shares are down 80% from its 52-week high and has a market cap of just $2 billion.
- Ancestry.com (NASDAQ:ACOM): Ancestry is a content based social network but it hasn’t been viewed as such. It has a loyal user base that spends upwards of $300 per year for the service. The benefits are a global presence, an attractive niche, significant barriers to entry, and the subscription model provides for revenue visibility. The market cap is only $1.3 billion.
- AOL (NYSE:AOL): The company is in a turnaround phase and itself is being challenged by FBOK for share of display advertising dollars. AOL has rich self-produced content that can be leveraged across FBOK. The market cap is only $1.6 billion.
I will leave you with something to think about. It was Google is 2004. Facebook in 2012. Who will it be in 2020?