Facebook's iconic Initial Public Offering

Facebook is expected to tap public markets for $10 billion in the coming months in an offering that will value the company at up to $100 billion. It will be one of the biggest U.S. market debuts ever, and a prized trophy for the investment bankers seeking to win lead advisory roles.

That has set up a fierce competition on Wall Street, particularly between the presumed front-runners Morgan Stanley and Goldman Sachs Group Inc, which may offer their underwriting services for as little as 1 percent of gross proceeds, bankers and industry observers said.

That would be far less than the 7 percent fee that smaller deals typically fetch, or the 2 or 3 percent that large deals tend to command.Hoards of investors are keen to jump on the social media trend, and even a 1 percent fee would reap $100 million in revenue for investment banks, sending a lead advisor to the coveted No. 1 spot on IPO league tables

Facebook can easily negotiate a 1 percent fee for the entire group of investment banks that will peddle its shares, said James Montgomery - CEO of investment bank Montgomery & Co, "much to the chagrin of the underwriters." Such a low fee is practically unheard of for investment banking deals