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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.'"
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.
Don't go to school, can't register on the Facebook. Bummer.
Life in Orange County
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.
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.
"I am the king of the Romans, and am superior to rules of grammar!"
-Sigismund, Holy Roman Emperor (1368-1437)
Sure, its' alexa ranking is 62 but $2 billion for a site created two years ago? WOW! You would think a billion worth of investment into engineering and marketing could easily recreate facebook.
That may sound like a huge amount of money, especially when you consider that the company was launched just two years ago by a group of sophomores at Harvard University, led by Mark Zuckerberg
Hmmm...
/ Adds Mark Zuckerberg to his friends.
I'd like to know how they arrived at a 2 billion dollar asking price. That's probably the craziest valuation since google's IPO.
"I love my job, but I hate talking to people like you" (Freddie Mercury)
I e-mailed them once, since I administer an Internet filter in an educational environment, asking them if they would allow an option for high school staff to create an account just like they did with college faculty/staff. I've never received a reply.
Never look down your nose at others. Someday, someone is bound to see your boogers.
Great. So the future of business looks like this:
sumredrok: yo
facebk: yo!
sumredrok: asm?
facebk: 2/lots/watugot?
sumredrok: 750m?
facebk: up urs n00b
sumredrok: wtf?
facebk: 2b
foxyrupert: pwn3d!
"Capital, capital, everywhere, and no VCs who think."
How is a site like Facebook even worth $750 million?
What kind of wealth does it generate?
What kind of assets does it have?
"I love my job, but I hate talking to people like you" (Freddie Mercury)
There's only going to be one big winner in the 13-25 community space. Look at the massive inroads made by myspace.com. Hold out too long and the execs will end up delivering pizzas alongside the first wave of dot-com execs.
"I'd rather be a lightning rod than a seismometer." -Ken Kesey
Most of these type of things are paid for by advertising, is there even that much money spent on the internet though?
What is Facebook?
-==- Buy a Mac and leave me alone!
Ok apparently according to nbcnews he really is dead.
http://www.msnbc.msn.com/id/12050783/
But dude, pulling out a clique like that for a deal death is just sick..
2 Billion for facebook!?! Holy crap, the era of the dot com is back! I mean, seriously, facebook? You could completely duplicate that entire site with two college students working part time for a month, so maybe $10,000... THAT is the barrier to entry. Please let them spend 2 billion on this... That way my plan to sell pet food online won't seem to crazy.
"Your superior intellect is no match for our puny weapons!"
2 billion dollars? 750 million and they turned it down? This is the very cause for the Social Networking Backlash Techcrunch covered like snubster.com and isolatr.com
The value isn't in the tech... facebook is entrenched. Everyone is on facebook. Is that worth $2 bil? I dunno...
Computers can make otherwise intelligent people stupid, much like slashdot.
Facebook is already entrenched on nearly EVERY college campus in the United States. The first thing freshmen are told by upper classmen is to get on facebook. You can't buy that kind of advertising. Sure you could create a competitor but most likely it will be brushed aside as a facebook clone. There are a few facebook and myspace competitors out there but most people have the attitude of I already have myspace and facebook why do I need another one. In order to steal facebook's users you have to have some killer feature not yet covered by myspace or facebook.
So here's what companies see when the learn about sites like Facebook or MySpace: - Huge number of people - Vast majority are under 25 - Rapid word of mouth and hype spreading Now they think to themselves: "WOW, it's just like a TV show that gets millions and millions of teenage viewers---imagine the advertising potential! We'll make a fortune!" Unfortunatly for them, they're wrong. Commercials and product placements on TV are wildly different from those on the internet. TV requires you to watch them, and things can be soaked in subliminally with relatively little effort on the advertiser's behalf. Why is this? It's because people's attention is focused on what's going on, and the advertisements just slip in there most of the time. It's a fairly benign form of advertisement if you're engrossed in the program. Websites like Facebook on the other hand would require advertisements to distract the users from what they want to do. Banner ads and flash animations don't blend into webpages like a race car driver wearing 800 different brand names or a supermodel drinking a soda on TV. All internet ads do is to cause frustration and resentment among the users towards the product. So, while I'm sure advertisers wish that they could keep the same strategies and ideas that they have been using in TV, film, and radio for the last 100 years--sorry, you can't. The internet doesn't work that way. --- Just my 2 cents.
Friendster is reportedly up for sale: 5 dollars.
Google will pay someone to take Orkut off their hands, in Brazilian currency too!
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.
If I don't put anything here, will anyone recognize me anymore?
For one thing, as a "social network," MySpace tells you nothing about how you're connected to people. Facebook says "you know Pete who knows Lindsay who knows Robert who knows Kat." Much more interesting and useful, especially if a cool person happens to be one degree away from you. "Hey Katie, I met your friend Zack online. We should invite him to our party."
walk around a university computer lab and everyone's on their facebooks all the time. people use it for class projects, to hook up, to organize parties, for everything. and when you get sick of it, you graduate, you might stop using it, but then a fresh new group of people sign up. it'll never be lame. and these are 18-22 yr olds, every company's dream audience..forever.
$2 billion might be too much, but it's definitely a worthy investment if you're a gigantic media company. yea it might be cheaper to create your own, but you can't just create that kind of popularity..
They're looking for $2 billion? For a site that is nothing more than a glorified bulletin board?
Apparently in 7 years peoples memories have fallen by the wayside.
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
$750 million isn't enough for them? If I were the bidder I would offer them $750 the next time around.
Basically there's no technology to buy there, they're buying 2 billion dollars worth of ad space. They intend to use the site to ad/spam the crap out of the members (because where else is there a revenue stream with that site?) and then run it into the ground a la mp3.com. It is inevitable that the winners are the people who get the $2B, the people paying that are buying a particular demographic's attention for a few weeks until the demographic bails on the site, that's all.
stuff |
If you went to college, many give alumni free email forwarding from a school site. This is for three reasons (1) the prestige of having a college email address; (2) a stable one that will last for 30,50,70 years for life; and (3) they get your real email address for fund raising.
I disagree with the idea that Facebook's registration system is its advantage because it closed--the advantage of the system is that it offers easy searching for people and arranges them in nifty, easy to understand hierarchies. Because Facebook requires registration from a college/high school email address the ease of searching and hierarchical arrangement is retained (whereas most people, I suspect, would default to signing up on Myspace with whatever aol.com or hotmail.com account they have.) This plus is a side-effect of the closedness, but I don't believe the closedness is an advantage all unto itself.
Some suggest that Facebook is somehow more safe for its participants. A surface examination may suggest that, but I think on a practical level it's not. As the security fears of Myspace die down (they're really just the normal internet dating fears that we've always heard except now brought down to 14 year olds plus the current hysteria regarding sexual offenders) I think that Facebook's closedness will be looked upon as a disadvantage.
After all, if you're going to spend $2 billion on Facebook, you'd want a pretty strong potential for growth, and Facebook will get maxed out too quickly, and the only new growth for it will be from new high schoolers who can add themselves in. The brand has to open up to create the value.
(I add, incidentally, that I've thought about this because Facebook, as it was originally designed, was a reasonable concept for a small college like Harvard. I go to Ohio State, where the idea of having so much information about you (until recently the default) presented to what is a mega-city sized student/alumni population is assinine. Though I've got a facebook account, I find the obscurity of myspace more convenient (though I don't post salacious pictures of myself doing stupid things that employers could discover later.)
Oooh! How many is a brazilian ?
Note to self: Stop putting jokes in my insightful comments so I can get something other than +1 Funny!
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.
2) Steal their source code.
3) Quit and start your own site.
4) Profit!
Apparently worked for Orkut and FaceBook!
It would be so nice if it took creativity and hard work and perhaps a little luck to get rich, but apparently a stale idea and a little PHP/MySQL knowledge is enough these days.
Am I part of the core demographic for Swedish Fish?
After reading some comments on here, it seems that some of you put facebook in the same category as myspace. Facebook is much better than Myspace and here is why.
1. All facebook profiles are uniform. They are the same color and can only have one profile picture. This makes everything so much easier on the eyes. The pages load quicker and relevant information is easy to acquire. There aren't a million pictures, animated gifs, songs, videos all over the page.
2. The majority of ads are text. Most of the ads are google type text ads, and only 1 or 2 ads are shown at a time. And here's the best part: The ads are usually bought by a student or local business. So instead of seeing huge flash ads for some shitty movie or band, you see relevant ads about a local bar special or someone who has a sub-lease available in their apartment.
3. You have to be in College (or now high school) to join. Facebook requires you to have a college e-mail adddress to join. While I'm not saying every college student is perfect and a big winner in society, you have to face the fact that most people that are on myspace are huge losers. I'm talking about all of the people who work the dead-end minimum wage jobs, do drugs every night, just take webcam pictures of themselves, and are going nowhere in life. There is none of that on facebook.
4. Information is not readily available to anyone who wants it. To view someone's profile you have to go to the same school as them. If you don't go to the same school you can still see that they have a profile, but you have to be added as their friend before you can actually see the profile. This greatly cuts down on all of the stalkers out there.
5. Facebook is a legitmate communication tool. Many professors have embraced the technology and joined facebook. Even my college president (at the u of Iowa) is on it. I know many friends who now send messages to others on facebook instead of e-mail, citing the fact that most students will check their facebook messages more often than their e-mail. Myspace can't be used for communication except for saying things like "thanx 4 the add", "check out my new webcam pix", "damn baby u r so hot"
There are probably even more comparisons I could make but I'm running late for class. Facebook hasn't been around quite as long as myspace, so I'm sure it doesn't have as many subscribers. I'm bettting though as years go and more people go to college the site will become much bigger than myspace. It's just so much cleaner and easier to use.
I think selling facebook would be a huge mistake. The way it stands now, the site is run by a couple of students (or former students, they may have graduated) They've added many features, but have done it subtly. It seems like every time more functionality is added on myspace it just makes the profiles that much uglier. When it happens on facebook, it makes it that much more usable. I'm only afraid that if the wrong company buys the site, they will try to compete with myspace and try to turn facebook into another myspace. Sorry for the rant, but I hope that this post will enlighten some of the people who have just read about these sites but haven't actually been able to join the facebook.
I'm kind of curious how much revenue Facebook pulls in from advertising.. I've advertised just at my university and that cost about $10/day -- I have no idea how much it is for a global advertisement or how many advertisers there are.
And to everyone that's saying Facebook is stupid/pointless/never heard of it... I re-iterate what others have said: if you're in college right now, it -is- important. It's one of the easiest ways to exchange contact information; all you need to do is remember a name and ask, "are you on Facebook?" and bam -- email, address, clubs, phone number, pictures, everything. It's extremely convenient when you meet people in unlikely situations. And I check Facebook usually once a day, and compared to a lot of people at my school, that's not bad at all. So make fun of it all you want... it's a great networking tool and very, VERY popular right now for the 18-25 crowd.
cndrr
facebook is a niche site towards students...how will they convert that over to a public site and if not how will that help viacom?
___ Shout Central - Crushes your nuts!
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.
It's not even just education-related services... Anything that services the high school and college age crowd is going to get a renewable audience (thus able to include MySpace, and why it is so successful). http://www.student-manager.com/, http://www.facebook.com/, http://www.myspace.com/, http://www.blackboard.com/ all have one thing in common: They service the high school to college age crowd.
Student Manager - Take control of your education!
So, after dropping 40+k in your coffers, I have to ante up an additional $60 a year for email? Yeah, I'll get right on that.
Unheard of? How old are you?!
Hey, I finally got my first freak! Took you long enough!
Facebook me!!
I think what the facebook people are trying to say is that the company is not for sale unless you pony up with $2 billion. If offered that much money then they would consider giving up creative control and any revenue that might be streaming from it. It's not about being greedy but rather about putting a high pricetag on something you don't want to sell in the first place. I wouldn't sell my car but if someone offered me $100,000 for it, you bet I would sell it and buy another one.
My understanding is that they were offered $750 million not that they were looking for a buyer. That makes a huge difference.
They do need to keep it the way it is, campushook was ruined when it was taken over.
Why can't people come along and offer me millions of dollars for my websites? Damn... Oh.. right.. content. Heh.. minor detail. :-)
Hexy - a strategy game for iPhone/iPod Touch
Facebook and Myspace are the best way for old people to pick up unde.... err, they're great marketing resources!!
For people that actually use those sites to create a network of associates, it's great business. I've made a number of contacts that have benefited by greatly.
[%] Cingular Ringtones
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.
This sounds very similar to a situation with old PointCast, one of the early purveyors of "push" content. They had a similar hubris. Let's see if Facebook ends up in the same pile with PointCast.
"PointCast turned into a case study for how not to run a business. In 1997, when push fever was at its peak, the company turned down a $450 million buyout offer from Rupert Murdoch. It subsequently tried to go public, but by that time push had gone sour, and the IPO had to be pulled at the last minute. Finally PointCast was sold last May for a paltry $7 million to LaunchPad Technologies, one of the companies that came out of Bill Gross' Idealab."
Hey, Windows users, there is no such thing as "forward" slash, there is only slash and backslash.
Did you even go to college? First its the seventh most trafficked site on the net. Second, the name is a reference to college books of freshmen faces that many give out -- aka face books. I use both myspace and facebook and facebook is by far better and actually has a use for people in college. facebook is our phone directory, meeting place and bulletin board. when you meet someone, its no longer "whats your phone number." thats been replaced with "are you on facebook." by knowing their name only, you get all their information. Also, say you need to ask that person you sit next to in class a question but don't know their name... you can search through the school's classes and find their profile. you can also stalk hot girls too. you may like myspace but to say that facebook is unheard of --- that is a gross understatement. your problem is that you're just out of the demographic.
[insert lame joke here]
The problem is, if you stuff Facebook full of ads, people will leave. Just as quickly as they came.
Thats why facebook has emerged victorious (somewhat), because its solid and clean, and only other students can look at your profile (aka fairly secure). Pump it full of annoying ads and stuff, and the facebook crowd will find somewhere else. Pump Google's homepage full of blinking flashing ads and watch another 'clean' search engine pop up and take marketshare...
Han shot first.
There is NOT enough advertising to ask for that much money.
Advice - SELL and get out . Nothing unique about the website.
The Facebook boys got caught stealing source code from ConnectU.
http://en.wikipedia.org/wiki/Facebook_(website)
I'd sure as hell never heard of them. So I googled them. The first result? "PointCast: The Rise and Fall of an Internet Star". At one point the article says Microsoft was bundling their software with internet explorer. There will always be stubborn dumbasses. And watching them fall on their faces will never stop being funny.
If an officer ever threatens to taze you, say you have a pacemaker.
there is a BIG change though. Facebook changed their advanced search which used to be awesome, to a new lame-o search that sucks. i think they did it to prevent stalking but it could be the death of their site. Search is the big thing, and if someone replicated Facebook but with AWESOME search (say, Google), Facebook would be dead in an instant. you used to be able to look people up by cross-listing Concentration, and say, Year, and say, interests. Not anymore. LAME!
As most Slashdotters know, there's always some Next Big Thing happening on the Internet. Nearly all the tech we take for granted was a huge deal when it was new. Think about the Web, scripting languages (dynamic pages), peer-to-peer, instant messaging, blogging, and countless others.
The funny thing is, they all seem to follow the same course. First, there is a precursor, be it a similar technology or a less-successful attempt at something very similar. Then, a huge rise to the point where "everybody" knows about it and is predicting either paradise or apocalypse because of it. After this, it either fades and dies, or splits into many different companies/groups offering the service, or a bunch of splinter technologies. Wash, rinse, repeat.
Surely what they do to recoup their 2 billion will force the user base elsewhere? Plus this might be huge in the U.S but I don't see it taking off in the U.K simply because we're not as gay as you lot. Cheerio!
Give me good ratings or I will close down the internet.
I don't know how many people are going to have to say this, but:
It's not the technology or anything else concretely valuable about the site that Facebook is trying to sell. It's the huge advertising audience they have at their disposal. Sure, whoever buys it may have to think up some original advertising methods to make their money back, but that kind of audience is worth it.
We're talking about an *absolutely huge* number of 18-25 year olds, with their shiny new credit cards (as somebody pointed out - i don't remember who), ready to spend online. It may not last, but $2bn may well be what that kind of audience is worth *right now*. And with some ongoing improvement, it's quite possible that the audience will be self-renewing, purely through word of mouth from entrenched users.
Even if a better quality product comes along, bigger *does* have value. People *will* sign up simply because it's what their friends are using. I've seen it. Hell, I've done it. But what this means is that the audience that exists there today may well exist a few years from now. And that $2bn may just end up being worth it.
Me, I wouldn't buy it at $2bn. But I can see how some advertising giant might.
Every rule has an exception. Except this one. Oh bugger...
Mark Zuckerberg is 23 and will probably have be worth >$300 million by the end of the year.
What have you done with your life?
I think there is a world market for maybe five personal web logs.
Here's how I would think about the value.
According to Wikipedia the site has
So let's say... 6 million users, $750 mil price - that's paying $125 per user. If you needed a 10% return and assuming it's a stable user base that won't disappear, you'd want to make a profit of $12.50 per user per year. Is that reasonable? I don't think it's unattainable given it's regularly used and the site's demographic.
If they get $2 bil and you need a 15% return, you'd want to make $50 per user per year, or you'd need additional user growth beyond the 6 mil.
MyLinkVault - online bookmarks with a fast drag-and-dr
Is Facebook worth $2 billion? I don't know. I do know that there are only two websites whose names I hear used as verbs every day: google and facebook. If you want to see what a sample facebook profile looks like, click here. This doesn't demonstrate the ajax-y goodness that constitutes a lot of the interface.
My take--this is a bullshit rumor, and they float the high number out there just so when someone REALLY offers $300 million, no one balks and everyone thinks it's actually CHEAP.
How often do you try and view a page on myspace to get some message like "down for maintenance" and then you hit refresh and it's there. I swear myspace serves error pages at random... and all of their notifications about maintenance are lies. It's the buggiest website I've ever seen, and it hasn't gotten better even with News Corp. backing.
Facebook has always been pretty nice. And they regularly add new features to it and make improvements to the interface. Oh yeah, and it's pretty much never "down for maintenance".
Indeed, being anonymous on Facebook makes no sense. Now, I've noticed there are a lot of people that set their name as Chuck Norris, Jesus Christ, and Santa Claus. (Of course, some of them are actually named Charles Norris.) And I also notice they changed the search since the last time I searched.