Morgan Stanley: Master of Social Media IPOs

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Tom Taulli, InvestorPlace Writer

NEW YORK ( InvestorPlace) -- Facebook's IPO is going to be a huge money-maker for both its employees and venture capital investors -- but probably not for its lead investment bank, which likely will be Morgan Stanley ( MS).

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According to a Reuters report, it looks like Morgan Stanley -- or other front-runner Goldman Sachs ( GS) -- will take a big cut in its typical fee structure. While fees usually run between 3% to 5% of total capital raised, Facebook's IPO could run as low as 1%. Though 1% of a possible $10 billion raised still is a cool $100 million.

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But the Facebook transaction is about more than just making a nice profit. Snagging the deal could cement an investment bank's reputation in a red-hot category. Of course, to date, Morgan Stanley is the head honcho of social deals, with Zynga ( ZNGA), LinkedIn ( LNKD) and Groupon ( GRPN) among IPOs it can list on its resume. Here's a closer look at how Morgan Stanley has done in the social IPO space:

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True, these deals haven't gone perfectly, as seen with the mostly negative returns. But it is not easy to get a sense of company valuations in a new industry. And the extreme market volatility throughout 2011 certainly didn't help.

Tom Taulli runs the InvestorPlace blog "IPOPlaybook" , a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of All About Short Selling and " All About Commodities. ." Follow him on Twitter at @ttaulli .

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  • This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.