Facebook needs IPO for further funding?

At last night's Chinwag Freecomics event (see my report here), some of the scuttlebut was about Facebook and when, and how much Microsoft would buy them (Truly scuttle, but the storyline is that Facebook will run out of money within 18 months or so as every new customer loses money, growth is rampant, and costs are increasing with new higher bandwith changes - so if it can't get funding.....).

Scuttlebut indeed, but this report today from Boomtown on the CFO's demise made me think again:

In addition, trying to stanch the rumors of its financial weakness and need to raise more funds, Facebook said in its internal memo to staff that it was on the path toward a public offering soon, with revenue growth up 70 percent in 2009 and EBITDA profitability this year, and that it would be cash flow positive in 2010.

The memo also painted Yu’s departure as another step toward its much-anticipated IPO, although it is clearly an ouster of much more complex internal reasons about how Facebook is run.

Interesting as Yu was apparently hailed as a key part of the YouTube sale......

Given that Yu has been running around trying to get in extra funding for the last 6 months at least, this seems to be a sign that (i) funding probably ain't going to come from further risk or debt funding, so increasingly the only path to further funding is an IPO, and (ii) Yu's been shot for being the messenger about how tough it is to bring in money for an overvalued company in a post crunch market.

Speculation I admit, and its the bane of the blogosphere - but its' not that idle, so here's our prediction. If we're on the right path, Facebook will bring a Heavy Hitter IPO Veteran on board as CFO.

They'll need him or her......

(Update - WSJ article saying much the same as I have - I wuz first