Why You Should Like the Facebook IPO

by Nick Schulz

Facebook’s IPO will be good news for a whole host of reasons. In particular, users should be happy that the company will become a much more public-facing entity. This is especially important for the ongoing debate about privacy in the digital age.

It’s interesting spending time with Facebook’s financial filings. One risk factor the firm notes:

Improper access to or disclosure of our users’ information could harm our reputation and adversely affect our business

As a public company, Facebook will be highly sensitive to perceptions that it violates user privacy, so they will be more likely to take steps to make sure their users are sufficiently informed about how data about them is used.

Another risk factor?

Our business is subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data protection, and other matters. Many of these laws and regulations are subject to change and uncertain interpretation, and could harm our business

It’s important to keep regulation limited and largely at bay in this area; in many ways the best privacy protection is a public company worried about its image, with shareholders who are worried about privacy risk and potential loss of value. Other companies that gather lots of user information due to the nature of their business – such as Microsoft, Verizon, AT&T, and Google — have often been quick to respond to user concerns and are mindful that privacy breeches will not go unpunished by the market. Facebook will soon face the same pressures. That’s good for all involved.

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