350 Million Reasons for Facebook to Go Public

It took a few more weeks than expected, but Facebook finally announced that it topped the 350-million member mark last night.

Founder and CEO Mark Zuckerberg blogged about the milestone in passing, preferring to discuss new privacy setting initiatives and an end to broader regional networks. Why wouldn't he be doing a better job in trumpeting the new round metric? He has usually been quick to chronicle every time the world's leading social networking site lands another 50 million accounts.

Let's look at the dates of Zuckerberg's previously announced milestones:

Source: blog.facebook.com.

See the problem? Facebook hit the 300 million mark in exactly two months, but it took 25% longer to land the latest 50 million users. Clearly there is no shame in landing that many incremental registrations in just two-and-a-half months. Rivals News Corp.'s (NYSE:NWS) MySpace, Google's (NASDAQ:GOOG) Orkut, and Time Warner's (NYSE:TWX) Bebo probably combined for fewer new users in that time. However, if this is the beginning of decelerating growth at Facebook, it may also be the best time for it to go public.

Everyone else but Facebook appears to be cashing in on the site's success. Electronic Arts (NASDAQ:ERTS), The Knot (NASDAQ:KNOT), and Expedia (NASDAQ:EXPE) have paid up to acquire companies that are popular application developers on Facebook's platform. It's time for Facebook to see what the market truly thinks it's worth. Waiting any longer may find the market rally turning or investors losing their appetite if user growth rates continue to decelerate.

There is more to Facebook than just the raw user count, of course. If folks are spending more time on the site or if Facebook is finding new ways to monetize its traffic, earnings and revenue growth may not be decelerating at all! This still doesn't diminish the urgency of going public. The IPO window won't be open forever.