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Report: Yahoo in Talks to Acquire Facebook

 12:07 pm on Sep 21, 2006 (gmt 0)

The Wall Street Journal is reporting in a front page article that Yahoo and Facebook are in discussions. It pegs the deal at nearly $1 billion which is significantly more than News Corp. paid for MySpace (approx. $580 million) a year ago, which is a much larger site.

While I do not have a WSJ link to the full article, basic info on the potenital deal is presented on their website front page [online.wsj.com] and an additional article can be found here [thestreet.com].



 11:49 am on Sep 22, 2006 (gmt 0)

Yahoo Inc. is in serious talks to acquire Facebook Inc., the Palo Alto social networking site that allows users to post profiles online and gab, according to a published report.

If the deal is completed, Yahoo could pay up to $1 billion for the Web site, according to a Wall Street Journal report published Thursday.

Yahoo may pay $1 billion for site: Offer for Facebook being considered, according to report [sfgate.com]


 12:52 pm on Sep 22, 2006 (gmt 0)

Yahoo can improve its Yahoo 360 service. Maybe they are buying to please Wall Street Investors. They can buy Youtube also.


 1:23 pm on Sep 22, 2006 (gmt 0)

huge mistake IMO. $1 Billion can go a long way to build it's own service. I also that think Yahoo is throwing money just to say that they're doing something given that their stock was cut in half this year. Anyone talking about Geocities or Broadcast.com lately?

[edited by: walkman at 1:36 pm (utc) on Sep. 22, 2006]


 1:27 pm on Sep 22, 2006 (gmt 0)

A lot of money for something an avergae Webmaster like me has never heard of before...


 1:41 pm on Sep 22, 2006 (gmt 0)

A lot of money for something an avergae Webmaster like me has never heard of before...

That's OK in their eyes; you're not the target market. Ask any US college undergrad if they've heard of Facebook. If they have not, that's when it's scary.


 1:47 pm on Sep 22, 2006 (gmt 0)

Don't do it Yahoo! Social Networking is a FAD! ;-)


 2:27 pm on Sep 22, 2006 (gmt 0)

Unbelivable, I have never heard of this site before either. Smeels like a fast growing bubble to me. Some people never learn.


 2:51 pm on Sep 22, 2006 (gmt 0)

A new business on the block for VCs and startups alike - build a site that integrates well with the platform of potential buyer, then sell it. The site says "beta" on it, has Alexa rank of 71, which mysteriously went from 0 to that in short span of 2 weeks in January, and then stayed the same...sounds like a lot of p0rn traffic to me.

Seriously, Yahoo!, if you've got an extra billion lying around, I've got a social network site for you...scrambles to place a few thousand dollar ads on major sites and on p0rn networks


 3:02 pm on Sep 22, 2006 (gmt 0)

huge mistake IMO. $1 Billion can go a long way to build it's own service.

Yep. I was seriously considering investing in Yahoo a while back, thank god I didn't. Instead of Yahoo concentrating on improving their existing revenue streams, they just throw money at problems by acquiring other companies for extreme prices.

With investing this money into their YPN and YSM they probably would be making more money right now. Heck, project Panama would have already have been released instead of sitting in the background.


 3:08 pm on Sep 22, 2006 (gmt 0)

Do search the site's name, out of a bunch of news that come up there are clearly 2 patterns: a) same or similar dates, inluding a big promo push currently (lots of news date September 6-11), and b) in all these promos the site is positioned in title or first paragraph together with brands like Google, Yahoo! and MySpace.

Smells like a rotten egg.


 3:28 pm on Sep 22, 2006 (gmt 0)

Does facebook have a lot of registered users?

In a case like this, I can see a large company buying the user base, and then using yahoo ad's everywhere to generate money. However, the site looks like hell, doesn't offer anything, and is pretty much a baby on the net.

Maybe it's deeper than that....

Maybe a close friend to a CEO at Yahoo! owns or has major stake in that site, and they're using corporate politics to get a large chunk of money in their pockets.

Yeah... i've seen the second scenario a hundred times before. Thats what I'm banking on.

Thank god I don't have stock in that company.


 3:45 pm on Sep 22, 2006 (gmt 0)

>>> Does facebook have a lot of registered users?

7.5 million.


 4:58 pm on Sep 22, 2006 (gmt 0)

I would say Facebook would be more profitable in the sense that most of its users are 18+ while many of MySpaces users are in their younger teens.


 5:35 pm on Sep 22, 2006 (gmt 0)

If the deal goes thru, can you imagine what it will do to the value of MySpace?


 6:00 am on Sep 23, 2006 (gmt 0)

Trying to do the math here...

1 Billion dollars for 7.5 million users.

Thats 133 dollars per user?

I have 1057 users, does that mean I can sell my site to Yahoo for 140,000 dollars? :-). Did I do that right?


 10:20 am on Sep 23, 2006 (gmt 0)

Facebook is apparently taking close to 2 million dollars a week in advertising.

They have some amazing figures, 7.5 million users and something like %80 percent login and use the site EVERY DAY. That's a lot of eyeballs looking at ads.

The type of users are extremely valuable too, 18-25, university students are a pretty hard to reach demographic. I think Facebook is pretty much unique, there is no other medium that has such reach in this demographic.

In the Ivy League colleges in the US it has close to %95 takeup and it's a similar story in Britain, the top 20 or so universities have close to %100 of the students registered, with a large proportion of them using it every single day, for extended periods of time. For this kind of audience, $1billion seems reasonable.

I'm at university and facebook is a way of life, it's used constantly for socialising, gossip, arranging events every day at all hours of the day. People use it more than their mobile phones.


 3:08 pm on Sep 23, 2006 (gmt 0)

I felt bad when I saw this because I barely have heard of this site, and never took the time to visit it.
But now I after I read so much people saying they don't know it either, I feel better :)


 6:22 pm on Sep 23, 2006 (gmt 0)

>>> Never heard of it..

Don't you guys know any college students in the US?


 7:14 pm on Sep 23, 2006 (gmt 0)

First, there are many people outside of US.

Second, even with children, the odds of have sons/daughters in college age are as narrow as having them in prekinder garden.

My case: outside of the US and children under 5. My friends? same situation, small children, even my friends on USA.


 7:50 pm on Sep 23, 2006 (gmt 0)

guys, I am sure we never ever heard of many companies, but they still make cash. I did not know that they already have $100 million in revenue a year. With their undoubtedly huge profit margin, Yahoo could double the revenue and make this work. But then, another facebook could start and this loses the allure as it becomes part of Yahoo (i.e. No longer hip or "cool")


 8:33 pm on Sep 23, 2006 (gmt 0)

I am kind of surprised so many posters here have such little knowledge of the social media phenomenon. Considering the importance of this newer medium and how it affects search and search marketing I would expect everyone in the "industry" to be clued in.
Surely anyyone who makes a living building and/or marketing websites would have a working knowledge of how these sites are changing the web.
Or maybe I am placing too much importance to it?


 9:13 pm on Sep 23, 2006 (gmt 0)

One thing is having "knowledge of the social media phenomenon" which we do, and other thing is knowning each social network out there.


 11:03 pm on Sep 23, 2006 (gmt 0)


It is an odd one.

Frankly i think the social media phenomenon could well be a bit of a FAD and burn out within a few years, but currently, as of now it certainly pulls in a lot of interest thats for sure.

To be honest, ive always thought these kind of sites including the likes of myspace etc, were in truth a way for students and young kids to self promote themselves to find new partners and friends - thats all. I cant see any point to them other than that, hence why i think they are a Fad. Once you get over a certain age you dont want all you details plastered all over the net and value your private life more.

Certainly i dont know anyone over 30yrs old who can be bothered with them and i for one dont like them i think they are a waste of time and im active in the net industry.

So, the test is will those using it now, be using it in say 5 or 10 yrs time?. My view is they wont be and Facebook are probably getting out at the right time.

Meanwhile imo with no real trading history in terms of stickyness with age behind facebook other than a few years trading on the internet, the price looks very high to me and i cant see why Yahoo would need to spend this kind of money on this kind of business when they could roll out their own facility for less and tack it onto 360, If social media proves to burn out as a fad they will have lost nothing and if it carries on as a raving sucess they can always go for it or a similar business at a later time if their own version doesnt cut the mustard.

Without seeing the financials of Facebook i dont know how profitable it is or what upside it has from here, but no matter how good it is i cant see Facebook ever having a valuation multipal greater than this current price.

I guess you either love or hate social media sites - for me im in the not interested camp and 1 billion is an excessive amount of money thats for sure


 5:15 pm on Sep 24, 2006 (gmt 0)

If you go into a college computer lab anywhere in America, there is a very good chance that a student will be surfing on facebook. In fact, I am willing to put money on it. People I know have the facebook as their homepage, spend maybe 30-45 minutes a day on it, and absolutely love it. Its been around maybe for about a year and a half or so, during which time its constantly growing.

Only recently have they had some huge bumps in the road because of several new features that, in essence, made it way to stalkerish.


 2:57 am on Sep 25, 2006 (gmt 0)

IMO, IF Facebook is bringing in $2 million per week, the price isn't too bad for a company such as Yahoo. Yahoo could probably easily double the advertising revenue from $100 to $200 million per year. I'm not expert at these things, but if they are able to keep it going a number of years, then it would be a worthwhile investment. This is especially true if Yahoo is able to pay that billion in Yahoo stock (instead of cash) which might be equally overvalued.


 6:47 pm on Sep 25, 2006 (gmt 0)
I am actually thinking about investing in Yahoo! because of this possible acquisition. Not to mention that this is the lowest that Yahoo! has been in a very long time. A social networking site is the missing piece to Yahoo!s puzzle.

Facebook is a giganitic internet social networking site. Most people that I know where using it before MySpace, though Facebook may lose some allure by allowing anyone with an email address to use it instead of just students. For those of you who graduated college before 2005 you may not know what Facebook is but believe me, it is a beast!


 10:41 pm on Sep 25, 2006 (gmt 0)

Good post you have answered exactly how i expected it to be perceived by students

If those that graduated know nothing of facebook pre 2005 and anyone over say 35 isnt interested in social networking sites and Facebook is aimed at students then where is the stickyness for the long term?

Surely this type of site has to be a fad for the young untill they have less time on their hands to bother with it?.

My point is that Yahoo have no long term history for this site, they dont know if users will get fed up and move to the next craze, just like CB Radio for example!.

I think if facebook can sell out for 1 billion they will have done well to get out whilst they are ahead and i cant see Yahoo getting any good return on investment however, as one poster here said (good point) if its purchased with overvalued stock then its no so bad!


 2:06 pm on Sep 26, 2006 (gmt 0)
There will always be students looking to socialize. Once and/or if a market "retires" there is always another waiting in the wings. However since this site is now pretty much open to anyone (it will be in the near future unless plans are changed) you don't have to be a student to enjoy it or to become knowledgable about it.

In the future I am sure that the format may change from time to time however human beings needs to socialize will never cease to exist.

(Note: Facebook also assists those that are too shy in public to be able to socialize to meet and talk to people they may not otherwise talk to and can be a great networking site, a la myspace.)


 11:36 pm on Oct 12, 2006 (gmt 0)

Surely anyyone who makes a living building and/or marketing websites would have a working knowledge of how these sites are changing the web.

Yes, sure, we've heard the "true" version of the story behind MySpace...not the one "geek started it in the garage and everyone loved it".

This 32 message thread spans 2 pages: 32 ( [1] 2 > >
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