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As Facebook turns to Wall Street in the biggest public offering ever by an Internet company, it faces a new, unenviable test: how to keep growing and enriching its hungry new shareholders.
The answer lies in what Facebook will be able to do — and how quickly — with its crown jewel: its status as an online directory for a good chunk of the human race, with the names, photos, tastes and desires of nearly a billion people.
 
Facebook’s shares are expected to begin trading as early as this week. Already, lots of investors are scrambling to buy those shares, with giddy hopes that it will become a big moneymaker like Google. Because of that high demand, Facebook is expected to increase its offering price from its initial range, giving the company a valuation possibly as high as $104 billion.
In the eight years since it sprang out of a Harvard dorm room, Facebook has signed up users at breakneck speed, kept them glued to the site for longer stretches of time and turned a profit by using their personal information to customize the ads they see.
Whether it can spin that data into enough gold to justify a valuation of as much as $104 billion remains unclear.
“We know Facebook has an awful lot of data, but what they have not worked out yet is the most effective means of using that data for advertising,” said Catherine Tucker, a professor of marketing at the Sloan School of Management at the Massachusetts Institute of Technology. “They are going to have to experiment a lot more.”
Analysts, investors and company executives can rattle off any number of challenges facing the company. As it works to better match ads to people, it has to avoid violating its users’ perceived sense of privacy or inviting regulatory scrutiny. It needs to find other ways to generate revenue, like allowing people to buy more goods and services with Facebook Credits, a kind of virtual currency. Most urgently it has to make money on mobile devices, the window to Facebook for more and more people.
All the while, its ability to innovate with new features and approaches — to “break things,” in the words of Mr. Zuckerberg — may be markedly constrained once it has investors to answer to.
An investor said “They have built an incredibly valuable asset — as opposed to a business they have executed well.”