I predict that, in the next few years, Facebook users will be able to buy and sell stocks through their profiles.
Facebook will go public in 2012
Multiple sources are reporting that Facebook’s IPO will come in 2012. Their recent arrangement with Goldman Sachs will likely get vetoed by the SEC. When that happens, they will be forced to go public before May 1st, 2012.
When Facebook’s IPO comes out, thousands of people will rush to invest in it. Most of those people are probably already Facebook users.
Taking aim at Google, et al.
Facebook has clearly demonstrated their competitive approach to Google. They are vying with the search giant for internet dominance. Google’s strategy has been to enter every possible market and force the existing players to sink or swim. I believe Facebook will do the same.
They’ve added “features” to the site at a feverish pace: photos, videos, marketplace, locations, games. The list goes on. These features compete with Flickr/Webshots, YouTube/Vimeo, Foursquare/Gowalla, and Yahoo!, et al. respectively.
I believe the addition of a stock market feature into Facebook profiles is right around the corner, designed to compete with Google and Yahoo! Finance and to put things like E*Trade on the run. I’ve dubbed it “Facebook Investments.”
What better way for Facebook to create new revenue? First, get willing investors to throw millions at them by way of an IPO. Second, integrate stocks into people’s profiles. Now you can invest IN Facebook while investing THROUGH Facebook. And, of course, they’ll take a small cut of each trade.
Sites like E*Trade and ScotTrade take $7-10 per trade. Facebook could take $0.10 and make a killing, given the vast number of users in their database. How will E*Trade and ScotTrade compete with that?
Here’s the concept
I created a demo of Facebook Investments, based on some of Facebook’s existing products.
What do you think? Will Facebook integrate “Investments” into user profiles? Would you buy stocks in or with Facebook? Let me know in the comments or tweet at me.