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Steve Ballmer Says Microsoft Tried To Buy Facebook For $24 Billion (businessinsider.com)

Posted by msmash on from the itsy-bitsy dept.

Former Microsoft CEO Steve Ballmer told CNBC on Friday that his company tried to buy Facebook when it was "itsy-bitsy" for $24 billion. BusinessInsider adds: Facebook fielded a lot of offers in its early days. When CNBC on Friday asked Ballmer how much Microsoft offered back then, he said, "Oh I think $24 billion when the company was itsy-bitsy and he said no. And I respect that." Zuckerberg clearly made the right choice. He currently has a net worth of $57 billion and Facebook's market cap is $374 billion.

44 of 67 comments (clear)

  1. I wish they had succeeded by Oswald+McWeany · · Score: 5, Insightful

    I wish Microsoft had succeeded, facebook might be extinct by now.

    --
    "That's the way to do it" - Punch
    1. Re:I wish they had succeeded by OfficeLackey · · Score: 1

      Agreed! And if not extinct, it would have at least guaranteed their value never eclipsed $24 billion. M$ would have forced it to tile and slide laterally, on every OS version and re-branded it 3 time till settling on the name "FriendFace".

    2. Re:I wish they had succeeded by thegarbz · · Score: 1

      I wish Microsoft had succeeded, facebook might be extinct by now.

      Why would you wish Facebook extinct? A platform that is happily used by over 1billion people? You're free to just not use it you know. Block it's domain at your router and go about your life.

      I for one am glad that the internet isn't simply subject to the wishes of one Oswald McWeany.

    3. Re:I wish they had succeeded by Oswald+McWeany · · Score: 4, Insightful

      Why would you wish Facebook extinct? A platform that is happily used by over 1billion people? You're free to just not use it you know. Block it's domain at your router and go about your life.

      I for one am glad that the internet isn't simply subject to the wishes of one Oswald McWeany.

      Putting aside the part that my comment was mostly in jest; being serious, Facebook is ever advancing. It's annoying when sites require a Facebook account to join theirs, Facebook has become an alternate official ID in this country. Facebook tracks me, even though I don't have an account. I can control that I don't have my real name on the web, but I can't control if someone else posts a picture of me on facebook and associates my name with it. I feel like Facebook represents a huge privacy violation, not just for the users but even people who are associated with users. Facebook has proven to be rather unethical in their deployment of security and privacy options, often leaving people wide open by default when things change. Not to mention, facebook annoys me every night I go to bed and my wife spends the next three hours facebooking people.

      --
      "That's the way to do it" - Punch
    4. Re:I wish they had succeeded by fbobraga · · Score: 1

      The problem is that whatever filled its niche easily could have even worse.

      I doubt it: Facebook was made en have been developed before the privacy-aware era (tm)

    5. Re:I wish they had succeeded by fbobraga · · Score: 1

      It's annoying when sites require a Facebook account to join theirs

      It's really is... sometimes an facebook account is needed just to comment an article! Tinder needs an Facebook account to use... (for this kind of thing I have an Facebook account created with an disposable mail address :P)

    6. Re:I wish they had succeeded by fbobraga · · Score: 1

      but I can't control if someone else posts a picture of me on facebook and associates my name with it

      FYI: you can disable the ability of others taging you in any photos, in the privacy settings (I think: I don't use that, but helped some [physical] friends doing it)

    7. Re:I wish they had succeeded by jszpilewski · · Score: 1

      Facebook even scored twice as they managed to get Microsoft to provide them quite a lot of free advertisement that time. I remember creating my Facebook account because I thought it was one of Microsoft services from live.com I used at that era.

    8. Re:I wish they had succeeded by Oswald+McWeany · · Score: 1

      but I can't control if someone else posts a picture of me on facebook and associates my name with it

      FYI: you can disable the ability of others taging you in any photos, in the privacy settings (I think: I don't use that, but helped some [physical] friends doing it)

      That would require me creating a Facebook account, something I refuse to do.

      --
      "That's the way to do it" - Punch
    9. Re:I wish they had succeeded by lexman098 · · Score: 1

      It's annoying when sites require a Facebook account to join theirs, Facebook has become an alternate official ID in this country.

      This makes implementation easier for other sites, which is actually a good thing. You can make a throwaway facebook account and use it on *all* the sites you would otherwise have to create multiple throwaway accounts for.

      I can't control if someone else posts a picture of me on facebook and associates my name with it.

      Sounds like it's the someone else who's violating your privacy, not facebook. They could just as easily post the picture on their personal blog (which is a lot of what people use facebook for).

      facebook annoys me every night I go to bed and my wife spends the next three hours facebooking people.

      Again, that sounds like a relationship issue between you and your wife, not you and facebook. She could easily spend hours playing a mobile game and make you just as upset.

    10. Re:I wish they had succeeded by CanadianMacFan · · Score: 1

      There was an application called Sporty on my iPhone that I was really interested in that let you find people nearby to play sports. When it first came out the only way to sign up was with Facebook. I just checked and you can now use email and Twitter (not that I'd use Twitter). Whenever I encounter a situation like this I write the app developers and tell them that I won't use their product while I need a Facebook account.

    11. Re:I wish they had succeeded by thegarbz · · Score: 1

      but I can't control if someone else posts a picture of me on facebook and associates my name with it.

      This isn't a facebook problem. It's an internet problem. Send me a picture and I'll put it up on an FTP server if it makes you feel nostalgic.

      I feel like Facebook represents a huge privacy violation, not just for the users but even people who are associated with users.

      And how is this any of your concern if you don't use it, other than to control those people you associate with who would likely violate your privacy anyway?

  2. Weird... by JaredOfEuropa · · Score: 5, Insightful

    If someone offered me 24 billion for anything, even my hypothetical super-successful company that I built with my own blood, sweat, tears and sacrifice of a firstborn son, I would take it in a heartbeat. Same puzzlement over the Snapchat guys declining what I think was an overly generous offer for that company. Then again, I've never built such a company so I have no idea of what it means to give up control of it. Still... With 24 billion in your pocket you can pretty much do what you want, start your own new company, hell, start a space agency even...

    --
    If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
    1. Re:Weird... by swb · · Score: 1

      I don't know you, but I'd wager you're like me and you and I probably think of this in terms of $24 billion now versus...working.

      I think guys like Zuckerberg are just mentally in a different place. They're not in it for the money, they're in it for the rush of running a massive, growing company.

      Money isn't even part of the equation, and I'd bet even at the time money and even the act of paying for something wasn't something Zuckerberg even thought about. He just went places and did stuff, his view of money was the company financials, not his personal finances at all.

    2. Re:Weird... by ProzacPatient · · Score: 1

      With 24 billion in your pocket you can pretty much do what you want

      Actually 9.6 billion after taxes

    3. Re:Weird... by Actually,+I+do+RTFA · · Score: 1

      20.4 B after taxes, if all of it was pure profit right to Zuckerburg's profit. At least at the time. With today's tax laws, 19.2 B

      --
      Your ad here. Ask me how!
    4. Re:Weird... by ausekilis · · Score: 1

      Or with that kind of cash, pay off your debts and invest in stocks/mutual funds. Even if you assume a 3% return on 1 billion, that's $30mil a year. I could live off of that.

    5. Re:Weird... by c · · Score: 1

      Still... With 24 billion in your pocket you can pretty much do what you want...

      I expect there'd be a contract to work at Microsoft for a year or two...

      --
      Log in or piss off.
    6. Re:Weird... by Chris+Mattern · · Score: 1

      You don't understand Zuckerberg. This is climbing, for him. He doesn't sell Facebook to do what he wants to be doing, because running Facebook is what he wants to be doing. There's no place else he'd rather be.

    7. Re:Weird... by doconnor · · Score: 1

      Even win his company was worth a mere 24 billion, Zuckerberg could have walk away at any time with more money then he could ever spend. Creating something as powerful that encompasses the world probably appealed to him more then money.

    8. Re:Weird... by DarkOx · · Score: 2

      Well yes and no. With 24 billion in your pocket you are just another rich guy. Running an influential tech company you are a celebrity.

      Like you say with that kind of cash you can certainly try some other ideas out. The thing is you can try those ideas out if your the CEO and major stock holder of a huge company too. The only difference is rather than starting a new company you start a new department. If the idea is successful you can spin off the department into its own company, that you also run. If its a flop you move onto something else, and if any good technology etc came out of it ownership by the existing entity is clear and it can be use elsewhere.

      Provided Mark diversified a little by selling some facebook stock and buying some other assets, should something unthinkable happen; he has more influence, and more opportunity to try out crazy schemes like rural internet service via miniature dirigibles, than he does with money alone.

      There is no reason to 'take the money and run' in this case.

      --
      Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
    9. Re:Weird... by penguinoid · · Score: 1

      I bet he would have been more tempted if that 24 billion were for him. Usually such offers are to the stockholders of the company as a whole. And it seems it was a low offer, besides. (Of course, a company that is just a website can go the way of the dinosaur very very quickly)

      --
      Don't waste your vote! Vote for whoever you want, unless you live in a swing state it won't matter anyways
    10. Re:Weird... by Solandri · · Score: 1

      That's a key difference between how regular people and rich people tend to think about money. $x million is an amount. Income is a rate. Regular people think having a large amount of money is being rich. $100 million > $50 million, so they'll take the $100 million. Rich people think having a high income is being rich. $100 million earning 5%/yr is increasing at $5 million/yr. $50 million earning 40%/yr is increasing at $20 million/yr, and will exceed the value of the $100 million in 5 years,. So they'll likely consider the $50 million to be the better choice. You can see this among lottery jackpot winners. The long-term payment (over 20-30 years) is usually the better choice, but most winners opt for the immediate lump-sum payment.

      Likewise, Microsoft offered to buy FB for $24 billion because they thought that was the best place to invest their money to get the highest return on investment. Zuckerberg turned down the offer because he thought his highest ROI was in continuing to work on improving FB, rather than taking the money and investing it elsewhere. 50% of new companies fail within 5 years; 2/3rds fail within 10 years. So if you think the company you currently own is likely to experience strong growth, selling it with the intent of using the money to start a new company is a very risky proposition.

    11. Re:Weird... by fbobraga · · Score: 1

      If someone offered me 24 billion for anything, even my hypothetical super-successful company that I built with my own blood, sweat, tears and sacrifice of a firstborn son, I would take it in a heartbeat.

      hilarious comment, but think again: if the market value of this hypothetical company is ver4y higher, you still sell it or wait for a better offer?

    12. Re:Weird... by parkinglot777 · · Score: 1

      If someone offered me 24 billion for anything, even my hypothetical super-successful company that I built with my own blood, sweat, tears and sacrifice of a firstborn son, I would take it in a heartbeat. Same puzzlement over the Snapchat guys declining what I think was an overly generous offer for that company. Then again, I've never built such a company so I have no idea of what it means to give up control of it. Still... With 24 billion in your pocket you can pretty much do what you want, start your own new company, hell, start a space agency even...

      You will not get the whole 24 billion dollars... If you own the company out right (100%), then you would have to deduct taxes and the process will be quite a headache. If you do not own 100% the company, then it will be even less; plus, other owners would have something to say (as always)... Though, the amount should be enough for to retire right away if you aren't going to live life like some other billionaires all the time. ;)

    13. Re:Weird... by CanadianMacFan · · Score: 1

      What taxes? When you are that rich you spend a few hundred million on accountants and lawyers and you don't pay taxes.

    14. Re:Weird... by Hognoxious · · Score: 1

      At a pinch I guess so. You'd have enough time on your hands to do without a cleaner and if you were well organised you could cook your own meals rather than eating out or getting takeaways.

      Assuming you gave up work, of course.

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    15. Re:Weird... by mattack2 · · Score: 1

      The long-term payment (over 20-30 years) is usually the better choice, but most winners opt for the immediate lump-sum payment.

      Explain how it's a better choice.

      You pay tax now and can invest the lump sum payment and live off the proceeds. It seems like it's a far better choice to take the lump sum.

    16. Re:Weird... by ProzacPatient · · Score: 1

      Thanks. I thought the IRS tax bracket for that kind of income was effectively ~40%, and that isn't even counting state income tax (if applicable).

  3. Right choice, sure... by narcc · · Score: 3, Insightful

    Zuckerberg clearly made the right choice. He currently has a net worth of $57 billion

    With only 24 Billion, he'd be living hand-to-mouth...

    We value the wrong things.

    --
    Required reading for internet skeptics
  4. would have been awesome by jmccue · · Score: 2

    It would have created such an internet backhole sucking all the marketing crap it would probably have made it easy for us to avoid the crap we seen now on-line

  5. Re:It'd ne worth next to nothing now by cayenne8 · · Score: 2
    Ok..so Z would have been $24 Billion richer then, vs $57 Billion now.

    I don't get it...sure, that's about double the money, but at BILLIONS of dollars, what does that matter really?

    I mean, geez...I'd have taken the $24B and live the rest of my life on easy street.....

    I'm pretty sure I could somehow manage to stretch out $24B over the rest of my years on earth....[rolls eyes]

    --
    Light travels faster than sound. This is why some people appear bright until you hear them speak.........
  6. Re:It'd ne worth next to nothing now by rogoshen1 · · Score: 3, Insightful

    probably because it was less about the money, and more about control over his company/baby/project

  7. Questioning Zuckerberg's Choice by Actually,+I+do+RTFA · · Score: 1

    Zuckerberg clearly made the right choice

    Did he?. I mean, we can look at the outcome and say "yes, he made twice as much money". But I can look at the winner of powerball and say "that person now has a lifetime of whatever they want". Did they make the right choice to buy a ticket? Did the other people who bought a ticket also make "the right choice". I mean, it was the same choice (esp. since most winners auto-pick their numbers now, so pretend that happened in this example).

    --
    Your ad here. Ask me how!
  8. They couldn't ever succeed. by ctrl-alt-canc · · Score: 2

    Elop never worked for Facebook.

    1. Re:They couldn't ever succeed. by Hognoxious · · Score: 1

      That's a shame.

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
  9. Cash by DarthVain · · Score: 1

    Ya well it probably wasn't 24 Billion in cash. These deals usually have some very low value in cash (well in relation, huge to me or you), and most of it would have been in MS stock, which depending on its worth at the time determines its value. Likely trying to sell 24 Billion in stock is hard to do, and would probably affect the value, even if there wasn't wording in the agreement saying that you could do that right away.

    When ever I see these large values being thrown around I have to remind myself that they are largely imaginary values. i.e, Facebook is "worth" 374$ Billion. Yahoo used to be "worth" a lot more, or I wonder how Tom at Myspace is doing these days. Foursquare comes to mind also. These valuations in billions for these tech companies are not based on actual assets or anything... Heck I can only imagine the arcane wizardry used to dream up what some of these things are worth.

    Granted MS is pretty stable as those things go, but still. That said, I also would have taken the money and run and probably do something else with the rest of my life.

  10. Value in stock vs. cash by captaindomon · · Score: 1

    Yeah but his current valuation is based on his stock position with Facebook stock. There is no way, for example, that he could sell all of his stock at current market value without crashing the value. So if the offer from Microsoft was a cash offer, that may have been a much better bargain IMHO.

    --
    Just because I can hook a shark from a boat, I do no offer to wrestle it in the water.
  11. Re:It'd ne worth next to nothing now by CanadianMacFan · · Score: 1

    No Microsoft offered $24B for what the stock market values at $374B now. They were looking to buy the company, not Zuckerbergs share of it.

  12. Re:It'd ne worth next to nothing now by Man+On+Pink+Corner · · Score: 1

    But I have crap to sell and there are a lot of dumbfucks on facebook whom I can sell my crap to.

    In the immortal words of Mark Zuckerberg, "Welcome to Facebook."

  13. Re:It'd ne worth next to nothing now by cayenne8 · · Score: 1

    probably because it was less about the money, and more about control over his company/baby/project

    I guess I don't understand that.

    The ONLY reason I work, is to earn enough $$ to fund my lifestyle I like when I'm not having to work.

    If it were me and they offered me for something I started up, I'd sell it so fast your head would spin.

    I'd much rather spend my time doing fun things that working or nurturing a company.

    --
    Light travels faster than sound. This is why some people appear bright until you hear them speak.........
  14. Re: It'd ne worth next to nothing now by Anonymous Coward · · Score: 1

    both are correct. this form uses the verb in a simple past form, your case would be the past perfect. both are correct, one is just more formal

  15. Re:It'd ne worth next to nothing now by skegg · · Score: 1

    I'd much rather spend my time doing fun things that working or nurturing a company.

    And I'm sure Zuckerberg felt that growing Facebook was a fun thing.

    Once he was offered several billion for his company, he probably figured he could continue with this fun project knowing he could always bail and get at least one billion.

  16. Re: It'd ne worth next to nothing now by NEDHead · · Score: 1

    I don't think so

    http://www.verbix.com/webverbi...