• Business Week, Thursday, March 6, 2008 10:45 AM

During the Web's heyday, a profitable Internet company nearing $100 million in annual sales while luring a million new customers a month would have found itself on the IPO fast track. But, with a recession looming and tech bubble talk permeating Silicon Valley, Web 2.0 firms are in no hurry to go public these days.

Even the more established players like Facebook, LinkedIn and Slide say they aren't thinking about an IPO until 2009, at the earliest. As Facebook CEO Mark Zuckerberg says, "We'll do it when it makes sense for us."

Why the hesitation? First, the weak economic climate. Second, advertising on social networks has largely failed to live up to the hype. For all its 66 million users, Facebook still only made $150 million last year and lost money overall. Finally, add in the costs of the 2002 Sarbannes-Oxley Act and an IPO becomes an expensive, risky proposition. It's far better to wait for venture capital firms to swoop in with another round of financing.

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