Facebook On The Block

conq writes "BusinessWeek reports that Facebook has turned down an offer for $750 million and is looking for 2 billion dollars. The article speculates that one possible suitor would be Viacom. From the article: 'A Facebook deal would help Viacom founder and Executive Chairman Sumner Redstone fend off a growing challenge from News Corp. The media conglomerate run by Rupert Murdoch has poured enormous resources into the Internet during the last year. It acquired social-networking pioneer MySpace.com last year for $580 million.'"

Comments

oh brother

[Anonymous Coward]

i read garbage like this and think we're headed for yet another intenet fall. myspace? facebook? do we hontestly expect these fads to drive an economy? the web is 21st century snake oil.

Re:oh brother

[jcnnghm]

You obviously aren't in college. Facebook is a marketers wet dream. One of the hardest demographics to reach hits that site literally 20 times a day. And that includes everyone, especially the trend setting popular kids (who are often the most addicted).

Re:oh brother

[jcnnghm]

Somebody must see at least three quarters of a billion dollars worth of oppurtunity there. They're buying an audience, not a website.

Why?

[djdanlib]

Why do the Facebook people feel the need to sell their company? Come on, just keep running Facebook the way it is. It doesn't need to be sold.

Remember what happened when they sold mp3.com? It died a horrible death. If that happens to Facebook... a lot more people will be upset.

Re:Why?

[eln]

Why do they need to sell it? Because if they do they can retire to their own private island instead of managing a cheesy yet inexplicably hugely popular website?

Facebook is a cheesy unoriginal idea that became a huge fad, and these guys can reap a huge financial windfall for it. They would be fools not to sell.

Re:Why?

[BewireNomali]

I think why facebook s interesting is because it's self renewing. The difference with other social sites is that they quickly die the death most fads do.

Facebook is constantly renewing itself - with a new "class" as students leave and students come in.

So in my estimation, facebook is more valuable than Myspace because facebook has constant and consistent and probably measurable influx of new people. If they can permanently tie facebook to the college experience, then facebook becomes a very valuable long term commodity, because advertisers and content providers can target the entire college age audience at once. That would be huge.

also, from a financial standpoint, college students are even more valuable than high school students, as they all will be wielding credit cards for the first time, meaning they've just acquired their power to spend beyond their means. All my college friends incurred serious debt in college - in fact most of their debt was acquired in school. So advertising to this "new money" as it were, is very important.

Re:Why?

[SgtPepperKSU]

"At the same time, the population of Facebook is also expiring."
That's a good thing! That way advertisers are pretty much guaranteed that their audience will be of a particular demographic - current students.
You don't have that kind of assurance at myspace.

Re:Why?

[Irish_Samurai]

What does facebook do that it could possibly be worth $750 million dollard (or worse yet, the $2B they think they're worth)?

• An Established Brand, this alone takes a ton of cash and time to build up. It is worth purchasing as a whole.
• A Goldmine of demographic data that can be sold to marketers and shared with the purchasing company's other divisions.
• A captured, self renewing marketplace for advertising, word of mouth campaign launches, and buzz marketing initalization

Re:Why?

[jackbird]

...but isn't the number of kids turning 12 and signing up for myspace roughly similar to the number of kids entering college and signing up for facebook?

The new business model.

[vertinox]

You know... I've seriously thought about this myself. I just have to figure out how to make a site that generates a lot of hits with no real income and then sell it off to the highest bidder.

go ahead, inflate that bubble again

[Lazy Jones]

with such insane amounts of money pouring into overhyped dotcoms again, I can see the next crash coming... show me the myspace.com business model please - I mean, I'm all for sites driven by user-generated content (it works for slashdot and many others), but such large investments should have at least a tiny chance of being made back eventually (i.e. in the next 10 years or so) ;-)

the value isn't in the tech...

[yoden]

The value isn't in the tech... facebook is entrenched. Everyone is on facebook. Is that worth $2 bil? I dunno...

frighteningly familiar...

[drew]

Anyone here remember PointCast? What, never heard of them?

They were going to be the next big thing 10 years ago. If I remember correctly, they were offered something $500 million for their company and turned it down. They said they would be 10 times that amount in a few years. Well, a few years came and went, and suddenly they were worth less than a tenth of that amount.

Way to go, idiots. Newsflash: You're riding on a fad. Sell out when the fad is hot, because when it's gone you'll have nothing.

Oh well, their loss.

why did friendster not succeed?

[peter303]

Friendster was one of the earlier social networking attempts (its name derived from napster's brief file sharing success). When I first tried to use Friendster its servers were as slow as molasses. Facebook launched on Harvard's InterNet-2 capacity servers before going private.

Second, Facebook has a simply defined social network- the school. On Friendster you have to build your own.

Third is the luck of fads and momentum. Kids are notorious for following fads. Facebook was in the right place at the right time.

playing catch up

[na641]

sigh, when will these people learn that the net is in no way stagnant... as any long time user of these communities will tell you, dont expect any of them to be around for too long. instead of trying to play catch up with their competitors online, these large corporations should instead try to innovate (gasp!!) and perhaps start a new trend online. only then can they gain a real foothold.

trust me... as soon as facebook becames 'corporate' people will flee from it.

Re:Drunk idiots

[nelsonal]

Until the average American is nolonger an idiot*, and median income remains high in the US. There will always be great value associated with any tool that eases the separation of a fool from his money.


*Recall the quip, no one ever went broke underestimating the average American's inteligence.

2 billion is about right

[theheff]

I see so many questions about why 2 billion dollars is being asked for the ownership of facebook... it's really quite simple. Aside from the pictures and messaging, each member of facebook can list interests, favorite quotes, books, movies, albums, etc etc etc. There is SO much information going around on facebook, and though it may appear useless by looking at just one individual site, the information from every facebook site is pretty meaningful to a marketer. Information is money, just look at google. Will all that data you'd be able to see trends, what products will work where, what's important to this generation, etc. The possibilities with facebook are enormous, and I'm actually surprised that it's not higher than 2 billion.