Facebook Inc. plans to list its shares on the Nasdaq StockMarket, further cementing the exchange operator's position as thefavored venue for the biggest U.S. technology companies, accordingto a person with knowledge of the matter.

The person declined to be named because the discussions areprivate. Facebook filed for a $5 billion initial public offering onFeb. 1. While the market capitalization of New York Stock Exchangeshares is about triple the value of Nasdaq companies, the lattermarket operator has about twice as many technology corporationstrading for more than $1 billion, according to data compiled byBloomberg.

Exchange operators NYSE Euronext and Nasdaq OMX Group Inc.,rivals for virtually every IPO in America, competed for what may bethe biggest listing by a technology company. Winning the IPO meansmore fees, a boost in trading revenue and the chance to link anexchange's brand with the largest social-networking website in theworld.

“There's cachet to winning one of the biggest IPOs ever,” TimHoyle, the director of research at Radnor, Pennsylvania-basedHaverford Trust Co., which manages $6 billion including NYSEEuronext shares, said in a phone interview. “The straight-up valueof this IPO will make for a nice gain in listing fees, which makeup a meaningful portion of the revenue stream for exchanges.”

Robert Madden, a Nasdaq OMX spokesman, declined to comment onthe decision. So did Jonathan Thaw of Facebook and Rich Adamonis ofNYSE Euronext.

Nasdaq shares extended gains after the New York Times reportedFacebook had picked Nasdaq, and rose 1.2 percent to $25.52 as of 4p.m. in New York. NYSE Euronext fell 1.3 percent to $28.31today.

Nasdaq OMX lists seven of the 10 biggest U.S. technologycompanies by market value, including Apple Inc. and MicrosoftCorp., the two largest, as well as Google Inc. and Intel Corp. TheNYSE is the home venue for International Business Machines Corp.,ranked third.

Nasdaq OMX had more at stake because of the perception it getsall the technology companies, according to Sang Lee, managingpartner at Boston-based Aite Group LLC. Among Internet IPOs sincethe beginning of 2011, LinkedIn Corp. and Pandora Inc. picked NYSE,while Nasdaq won Groupon Inc. and Zynga Inc.

“Having that brand name on that listings side would be huge,”Lee said of Facebook's selection. “If they're able to do itcorrectly, the other social-media sites and players would certainlybe talking to Nasdaq initially,” he said. “It would certainly putthem in a very nice position.”

Blow to Niederauer

The loss is another blow to Chief Executive Officer DuncanNiederauer, who saw his bid to merge with Deutsche Boerse AG fallapart this year when European antitrust regulators blocked thedeal. Shares of the company slid 13 percent last year, while NasdaqOMX climbed 3.3 percent and the Standard & Poor's 500 Index waslittle changed.

Robert Greifeld, the CEO of Nasdaq OMX, exacts a measure ofpayback after his unsolicited attempt to acquire the New York StockExchange parent fizzed out when the Justice Department said lastMay it would sue to block such a transaction. Niederauer was on theboard that rejected Greifeld's offer and referred to it as “looselyworded and full of unanswered questions” in an interview withBloomberg on April 10.

The decision by Facebook follows Bats Global Markets Inc., thethird-largest U.S. exchange operator, withdrawing its IPO on March23. Bats planned to compete with NYSE and Nasdaq in corporatelistings, making its own shares the first to call the Bats BZXExchange home. A computer bug prevented Bats from getting its ownshares to trade.

Facebook, based in Menlo Park, California, filed Feb. 1 to raise$5 billion in the largest Internet IPO on record. The amount was aplaceholder used to calculate fees and may change. The combinedU.S. and German debut of Infineon Technologies AG in 2000 totaledabout $5.85 billion, making it the biggest technology offering inhistory.

Facebook wants “their brand identity associated with Nasdaq,where the leading pioneers in technology have listed,” PhilipPanaro, president and chief executive officer of IM2 ConsultingLLC, said in a phone interview. He was an adviser to Nasdaq in themid-1990s and to NYSE in 2004 and 2005. “NYSE is still the BigBoard and Nasdaq has more technology companies.”

Bloomberg News

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.