At Facebook, scripted earnings calls presage IPO

Facebook has its sights set on Wall Street. But before it gets there, CEO Mark Zuckerberg wants it to act like the industry's top companies.

According to the Wall Street Journal, which sat down with Zuckerberg and other Facebook employees, Zuckerberg seems committed to running more than just a social network. Taking pointers from the tech giants that came before him, he wants to make Facebook behave like an industry stalwart.

"There was a period in Microsoft's evolution where they said, we want to put a computer on everyone's desk," Zuckerberg told the Journal in an interview published today. "That's the way that I want to run Facebook...We want to be operating in a way that we're working towards this longer vision of where we think the world should be."

A key component in that plan is to go public, somethat that, according to the Journal's unnamed sources, Facebook plans to do in the second quarter of 2012. And it's hard at work now to get ready. For example, for more than a year, Facebook has been scripting mock earnings calls with hypothetical analysts to train staff on how to handle the sometimes-stressful discussions, the Journal's sources say.

In addition, CFO David Ebersman has been auditing the company's quarterly financial statements to ensure its accounting methods aren't called into question the way Groupon's and Zynga's were by the Securities and Exchange Commission earlier this year.

When its shares hit Wall Street, the Journal's sources say Facebook could raise as much as $10 billion on a valuation that could exceed $100 billion.

But there's more to an IPO than accounting methods. For one thing, it's all about timing. As this year has shown, companies that went off before the stock market started to slide, like LinkedIn, saw strong IPOs. But those companies that came either during the downturn or just after weren't so successful. Zynga had the worst IPO of any Web startup this year, watching its shares slide 50 cents to $9.50 by the end of the first day earlier this month.

Besides trying to learn from the mistakes made this year by Web startups that went public, Facebook executives have been analyzing how Apple operates, and trying to establish the Facebook brand as one that has serious influence and "staying power."

There's also the issue of the all-too-common "brain drain" that occurs after a Web startup goes public. After Google went public in 2004, nearly one-third of its first 500 employees had left. Since then, it has continued to lose key staff that joined the company in its earliest days.

Zuckerberg has reportedly lamented that eventuality, and for that reason has tried to delay the IPO as long as possible. Back in September, the Financial Times reported, citing sources, that Zuckerberg decided to delay the IPO until next year so employees would focus their efforts on improving the site and not on cashing out.

The Journal's sources echoed that sentiment, saying that Zuckerberg would have liked to keep Facebook a private company indefinitely, but due to a U.S. regulation that forces companies with 500 or more shareholders to publicly disclose financial information--a limit Facebook is rapidly approaching--he felt compelled to take the next step and go public.

Facebook did not immediately respond to CNET's request for confirmation on a second-quarter IPO date.