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Foursquare Turns Down $100M
theodp writes "Valleywag is stupefied that 'an annoying, unprofitable social network like Foursquare would turn down $100 million,' a move inspired in part by Twitter's 2008 rejection of a $500 million offer from Facebook, which in turn once rejected a $900 million bid from Yahoo. Time will tell whether the move by Foursquare was a prescient one, but it's certainly gutsy. After all, today's $850 million company can prove to be tomorrow's worthless one, right AOL?"
Christ, I don't think I've ever even heard of these guys. They should have took the money & ran.
There is a war going on for your mind.
Why would one offer them 100 mio for it if it's so worthless, for one.
For two, why is money such a big deal? If you love what you do and can provide for yourself with it, why whore yourselves out? It's not about being filthy rich, but doing what you love, right?
I think we can keep recursing like this until someone returns 1
That said, a shrewd business move is a shrewd business move - arrogant or not. This was not a shrewd business move.
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These guys turning down the money are idiots, all idiots. Twitter cannot create the revenue to generate the profit to pay back $500m. Or $900m in the case of Facebook. They [owners] all should have sold it, they're never going to get that kind of money anywhere else. Have you seek Zuckerberg give presentations? The goofball can't even give a proper PR announcement, let alone get people excited about anything Facebook is doing.
This goes doubly so when the buyer will let the owner retain control.
Dennis Crowley learned two things from his earlier experience of selling Dodgeball to Google. 1. A big company like Google can destroy a little company. 2. When your bank account is 8 digits big, 9 digits is not as important as following your passion.
What the hell is that? I thought Twitter was supposed to be the Next Big Thing?
Well, Foursquare seems to currently be the Next Big Thing in the location-based genre of social networking.
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in hindsight, maybe that wasn't the best of ideas, because nowadays I'm a bit like AOL in that department
Not really. AOL is fucked.
As soon as I read this article I wanted information about Four Square. I am now fully aware of it purpose and may suggest it to my friends. This guy is getting traffic from this move, it might have been for the best. Anyway, this guy has plenty of money as mentioned before. Will he really be happier with a extra digit?
We're going Fivesquare
I was 100% sure the $850 mil company was Myspace until I moused over . . . am I the only one??
Since when does being a Socialist mean 'someone who has a different opinion than me'?
Well, one day while playing an errant ball struck my gonads and caused me some serious injuries. For lack of a better description, it basically broke my penis. I now will never have children, and suffer from hormonal problems.
It's not like you would have had any kids anyway, so it's no big loss.
Man, I want this bubble to burst so bad. Is there a market to bet against the bubble? :-)
Fuck systemd. Fuck Redhat. Fuck Soylent, too. Wait, scratch the last one.
These start-ups love to pass themselves off as scrappy little guys nipping at the heels of giants. In my experience these companies, the vast majority of the time, are backed by investors with very deep pockets. These guys are undoubtedly banking on the hope that this investment will pay off in a big way. There's this infatuation investors have with these social sites and it's easy to see why. Minimal investment, little substance, but the pay offs can be huge if people get hooked. Why spend a fortune building a company that actually makes product, with the expense and work that comes with it, when you can just do this? And given that development can easily be outsourced to India these ventures even more attractive.
Right now they're at the hype generating phase. By turning down this offer they have garnered media attention. And amongst the ignorant masses people will believe that these guys are principled. I think they're waiting to hit critical mass with users. Their hope is that they become the next Twitter. Then they'll sell especially if they haven't figured out a way to make money on something that seems completely pointless.
Hey he's fixed the typo in the article!
"I sold my location-based service I started in my basement for 100 GPS units!"
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Only the deal makers know what the details of the $100 million deal. Chances are excellent it's a bad deal. Some ways the deal can be bad follow....
Often times, there is a top line PR number, that if *every* option played to the start up's benefit, then they'd have earned the number. But most of the deals are completed leave the start-up members meaningfully smaller pay outs.
Let's say the deal flies and the people selling meet the conditions of the purchase, there's the matter of actually getting paid. You think "Investors XYZ are buying my company and they have *plenty* of money." What they have are plenty of lawyers whose task is to generate as many billable hours as possible for the start up members leaving the start up members largely broke. Once the resources are exhausted, then the acquirer pays pennies on the price that was agreed upon years earlier. Yes, you read that right, years....
The deal is far from complete once the acquisition is executed. Chances are excellent there's only heartache for the start up members with a sale.
Today's lesson: making money is only one part of the process. You need to get paid.
http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
Maybe they turned down the bid because they wanted to stay independent and liked what they did?
Jesus, it drives me crazy listening to people go "what morons, they should have taken the money and ran." Why? What if they really like what they do?
Disclaimer: I'm not familiar with Foursquare's product or management, and I have this crazy notion that there are things that are worth more than money.
Foursquare looks at first glance to be a site where the entire point is to do things that earn 'rewards'. Looks like they call them 'badges'. Hmm... Life as a massive DnD game, minus monsters and death. Ok...
Like 'unlocking' my city (or cities, where I am). Oh yeah, sounds like endless billboards on my phone. Essentially advertising I participate in. Not a new concept, I participate in advertising now by losing pieces of my life to it.
Kinda like Farmville without the Facebook stuff. And more ads, I bet. Pointless? Doing virtual chores for nothing?
And of course, you never know when you might stumble across something interesting. So this is, like, a mashup of Twitter/Facebook/Latitude/Google Maps? Oh my. Friends in Maine will want to know all about my great restaurant find in Gilbert, AZ. Hell yeah. And the gelato place, too. In February.
But I might turn this on to see how much it sucks. And if I think it sucks, it is probably worth way more than $100 million. No sarcasm, just fact there.
You go guys! Rock the world! Good luck!
deleting the extra space after periods so i can stay relevant, yeah.
Social networking sites can either become incredibly successful or fail horribly, and it's generally down to luck as to which happens. He could make more money at a later date, or go bust.
Perhaps they were concerned that the exact GPS location of everyone's favorite places, activities, and friends could fall under the category of information that could be badly abused. It'd probably make me quit using it if they sold-out to some big company.
Has the US dollar really become so weak?
The article states that Twitter rejected a $500 million and that Twitter "had no revenue at the time".
Is Twitter making money now? If so, how the fuck are they doing it? Their service is FREE, they don't have ads, they don't SELL anything. Yet they have tremendous costs.
Same goes for Facebook. How the fuck are these guys actually MAKING money? Venture capital doesn't count because that will dry up some day. Does any of these social networking sites actually have a real, qualified accountant or two working for them?
These sites give EVERYTHING away for free, yet don't actually SELL anything (except for probably your "private" data). That business model just sucks and anyone investing in them is utterly clueless.
What I would like to know is a list of every single company/person who has invested in them so I know not to ever do business with those guys, or so I have a list of suckers I can get money from for money loosing ventures.
They make money from venture capital. Facebook doesn't talk much about its finances, but the Forbes articles I've read speculating on the topic seem to think it would be a miracle if it has yet to make a net profit in a year. And Facebook is the most successful social network with a well established way of selling targeted ads.
You don't invest in these companies because they'll make money, just like you don't invest in gold because it will make you dinner. You invest because you count on other investors sharing the illusion that the company is valuable and thus driving up the price of your share. Then you sell.
"I zero-index my hamsters" - Willtor (147206)
Who's Charlie O'Donnell? What's his role in Foursquare? Is he really making statements on their behalf? I doubt it. Quoting from the photo caption later on,
So, wtf? There's no story here, it's just some random dude repeating what some other random dude said would be a wise move.
A lot of people believe this to be the security risk. That a criminal will monitor a Loopt or Foursquare account to figure out when a house is unoccupied. In the real world, that's a far more sophisticated approach than what house burglars use.
Instead, they knock on the door of a house that appears unoccupied. If someone answers, they say, "Oh, I'm looking for my friend, Sally. Does she still live here?" If no one answers, then they proceed with the burglary. Finding empty houses does not require internet technology.
Seth
$5 / month hosted VPS on linux = awesome!
I downloaded this app for my phone and found it to be the dumbest app I have ever downloaded. They must be fools for turning that down, because by my estimation they won't last.
I, for one, welcome our new square overlords. It'll give the "religious circles" a run for their money. I can see how the religious circles would be irked by the homo-erotic behavior of four squares vs a normal single square married to a traditional acute triangle. Then again, it's also much less dangerous as the known dangers of being stabbed to death on a daily basis don't exist. /flatland-humor
Yeah... it made me think of the Windows logo.
Follow me
Isn't that redundant?
Exactly, I was just about to ask the same. I cannot think of any social network which I don't find annoying.
The only and last one I have ever joined is LinkedIn. Being business-oriented, I found it to be at least marginally serious and useful; but as it turns out it is infested with spammers (so-called "LIONs",) attention whores, recruiters and other kinds of human scum. Essentially just like any other social network in existence.
Speaking as an entrepreneur, and the founder or co-founder of multiple online businesses, there is nothing I would love more than tempting one of the big fish into offering me my desired lifetime's earnings for one of my startups. I'd sell in an instant, no matter how much love and devotion had gone into the business. That's kind of the jackpot for most of us serial startup folks. (Being the owner of a moderately successful enterprise is a very distant second, though acceptable, option.)
Funny thing is, the very next thing I'd do after selling one business is start up another one. And that one I'd just do for fun, and I don't think anything would tempt me to sell the second business, other than eventually getting tired of it and wanting to devote myself to something else.
The Quirkz Handbook of Self-Improvement for People Who Are Already Pretty Okay
Man, you must really hate walking around in the real world, then!
It's okay, nobody really wanted to spend time with you either.
Geez they got that right. The sites down now. Awesome marketing if their looking for a future buyer or users from a bit of free press. lol.
I cant help but think there is another .com type bust to happen with social media. It seems too much money is being thrown around by companies and organisations with no understanding of the subject matter and little new revenue being created. I know companies like Newscorp and Yahoo want to get a hold of popular social media sites to get access to the install base but they dont realise that doing so will kill the install base.
I wonder if these rejections will hasten or delay the bust of social media.
Calling someone a "hater" only means you can not rationally rebut their argument.