updated 09:38 pm EDT, Tue May 29, 2012
VKontakte stays private, says Facebook destroyed faith
The ongoing fallout from Facebook's much-maligned initial public offering appears to have spread beyond the American stock market, as popular Russian social networking site VKontakte has announced that it would be delaying its own planned IPO. According to Russian newspaper Gazeta, VKontakte officials specifically noted the impact of Facebook's IPO on confidence in the investor community as a reason for the change in plans.
VKontakte, which has a 100-million-strong user base, was expected to go public some time in 2012 or 2013. Its own IPO was highly anticipated among Russian investors until the delay announcement. An hour later, Chief Executive Pavel Durov announced through Twitter that "[an IPO for VK is] Not planned. FB's IPO destroyed trust in social networks among many private investors."
There is more at work than simply Facebook's own IPO troubles. VKontakte investors are currently shuffling voting rights among themselves, with Durov likely to emerge with majority control of the company. Still, Facebook's IPO, with its continual twists and recriminations, looms large over the VKontakte proceedings, and some expect that it might have an impact on other Internet-based companies like Pinterest and Zynga.