5 Things Facebook Must Do Before Its IPO

John recently discussed his LinkedIn post-IPO wish list. With growing speculation on a Facebook IPO in 2011, I thought it might be worthwhile to compile a checklist for Facebook to accomplish before their IPO:

1. Name Sheryl Sandberg CEO - As Chief Operating Officer, Sanderg has been able to do the one thing CEO Mark Zuckerberg couldn't - make money. Ultimately, investors are concerned about revenue and profit. It's great that Facebook connects everyone, but if there are no monetary benefits - who cares? Positioning Sandberg as CEO will signal a focus on monetization to the market. It will also allow Zuckerberg to do what he does best - concentrate on product and technology development.
2. Stay Lean - A tendency for disorder always accompanies growth and expansion. While Google has committed to hiring more than 6,000 workers this year, Facebook, a company of 2500 employees, is focused on efficiently automating internal processes and growing smaller.
3. Understand The China Factor - having an entry strategy or approach to engaging the Chinese market will resonate with investors, especially in light of the Google's missteps there. Currently, China appears to be a point of contention between Zuckerberg and Sanberg.
4. Own the Funnel -While Google AdWords hover around the point of sale, COO Sandberg wants to operate at the top of the marketing funnel by "creating positive brand affiliation and generating demand for products." To do this, Facebook needs to offer detailed analytics to support this claim. Without proof, ad dollars will continue be spent on AdWords - closer to the sale.
5. Protect Privacy - Privacy and more importantly, forced privacy audits, should be put in place. Facebook has steadily decreased default privacy settings. As users continue to share more relevant data, the risk of a security lapse in terms of lost users to Facebook grows. Much like credit card companies are providing avenues for credit card users to save, Facebook must provide a clear path for privacy for their users.

Do you think this is enough? Should Facebook do more to prepare for its IPO? Or is Facebook ready for an IPO today?

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