Facebook creator rejects $750mil offer, holds for $2 BILL!! Question about this

Discussion in 'Wall St. News' started by BulkCity, Mar 30, 2006.

  1. BulkCity



    I was wondering... to avoid taxes could the owner denounce American citizenship, get citizenship in another country, then move and not have to pay as much tax? or is there some law that if you run a business/create something in the US you pay taxes there... (I know very little about the legal environments of business)

    for example - if he moves to Dubai or Arab Emrates (?) I think he'd pay virtually no taxes (comparitively)



    Facebook's on the Block
    The owners of the privately held social-networking site hope to fetch as much as $2 billion. And media giants like Viacom may make a good match

    Facebook, the Web site where students around the world socialize and swap information, has put itself on the block, BusinessWeek Online has learned. The owners of the privately held company have turned down a $750 million offer and hope to fetch as much as $2 billion in a sale, senior industry executives familiar with the matter say.

    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 (see BW Online, "Under 30, On the Cutting Edge"). But already, www.facebook.com has become the seventh-most heavily trafficked site on the Internet, according to market researcher comScore Media Metrix. It racked up 5.5 billion page views during the month of February, the latest month for which complete data are available. That's more page views than the Web sites of Amazon.com (AMZN), Ask.com, or Walt Disney (DIS).

    GOOD FIT. It's not clear who would be willing or able to pay that much. Industry analysts think that Facebook might be a good match for Viacom (VIA), which owns the MTV, VH1, and Comedy Central cable networks. "I think Facebook would be a great strategic fit for Viacom," says Troy Young, executive vice-president and chief experience architect at Organic, an online advertising and consulting firm. "Viacom has people working on social networking. But I think they need to demonstrate to the market, through a major acquisition, that they are on top of the youth marketplace," Young said. Viacom declined comment. Facebook executives weren't immediately available for comment.

    A Facebook deal would help Viacom founder and Executive Chairman Sumner Redstone fend off a growing challenge from News Corp. (NWS). 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 (see BW Online, 11/15/05, "Users Crowd into MySpace").

    MySpace has continued to grow since the acquisition. It had 37.3 million unique visitors during the month of February, according to comScore. It logged 23.5 billion page views, making it the second-most trafficked site after Yahoo, which had 30 billion. MSN (MSFT) was No. 3, with 18 billion, and Google (GOOG) was No. 6, with 7.7 billion. News Corp. also acquired gaming and men's lifestyle site ign.com for $650 million (see BW Online, 08/22/05, "IGN Entertainment: Where the Boys Are").

    ATTRACTIVE TO MARKETERS. Sites like MySpace and Facebook, and social-networking rivals such as the video-oriented YouTube are promising new channels for communication, entertainment, and marketing. Social-networking sites are a primary form of communication for millions of younger people in the U.S, and increasingly, around the world. It's not unusual for young people to spend an hour or more a day at such sites, posting photos, messages, and blog entries, and building up huge lists of online "friends." While advertising rates on such sites are low, marketers of music and consumer goods have flocked to MySpace and its rivals.

    Facebook doesn't match the scale of MySpace, but Organic's Young says it presents a great opportunity for marketers. The site admits college and high school students, though it's more popular on a college level, and the atmosphere is more controlled than the free-wheeling MySpace.

    In recent months, parents, politicians, and police have become concerned that criminals could be taking advantage of MySpace (see BW Online, 03/06/06, "Making MySpace Safe for Kids"). On Mar. 21, Connecticut Attorney General Richard Blumenthal called on the company to take steps to protect minors from potential harm. MySpace says that it shares the concerns about safety and security on the site and is working with the attorney general to bolster its safety practices and procedures.

    WAY BEYOND CAMBRIDGE. Zuckerberg founded his company, originally known as The Facebook, as a way for classmates at Harvard to communicate. It was named after the books that colleges typically provide students, listing profiles and pictures of classmates. He asked friend Eduardo Saverin to help fund the site. Classmates Chris Hughes and Dustin Moskovitz joined as co-founders. The site was an instant hit at Harvard, and it quickly took hold at other schools, such as Stanford University. Since then, it has spread across the U.S. and other parts of the world.

    Just a few months ago, people scoffed at the hundreds of millions that Murdoch spent on News Corp.'s Net acquisitions. But those prices are likely to be surpassed in the near future, as M&A activity in the social-networking sector heats up.
  2. You know you're getting old when.......

    This is the first time I'm even hearing about this site.

  3. :D

    My reaction exactly... never heard of it.

    #7 website, ahead of Amazon?! Good to see our future leaders from Generation Y seem to have plenty of time on their hands...
  4. Me too. :confused:
  5. The owners technically have little say in this, the VC's call the shot in such decision.
  6. What's really pissing me off is that such a simple idea, so late in the game. could be worth this kind of money?

    You sure they aren't laundering mob money?
  7. As a junior at UCI I can say without a doubt how important facebook is. Just about every single person I know has a facebook. I know I leave it open and check it just as frequently as I check my email. One of the first questions people ask in class is 'Are you on facebook?'. With the large group of college students and recent grads on the site I can definitely see the huge marketing potential in grabbing this soon to be affluent group. They have a feature called pulse which is a raking of different categories of information collected from students and grouped by school. Tell me advertisers and media execs would like to have this list generated in realtime from every place of higher learning in the US Canada UK and several other counties.

    Excepts from The Pulse:
    Music (at UCI)
    1. Coldplay
    2. The Killers
    3. Green Day
    4. Jack Johnson
    5. The Beatles
    6. The Postal Service
    7. Jimmy Eat World
    8. Death Cab for Cutie
    9. Incubus
    10. Linkin Park

    Music (Facebook wide)
    1. Jack Johnson +1
    2. DMB -1
    3. Coldplay
    4. The Beatles
    5. Green Day
    6. Led Zeppelin
    7. The Killers
    8. Incubus
    9. Sublime
    10. Fall Out Boy

    Television (at UCI)
    1. Family Guy
    2. Simpsons
    3. Friends
    4. Grey's Anatomy
    5. Lost
    6. 24
    7. The OC
    8. Sex and the City
    9. Desperate Housewives
    10. Gilmore Girls

    Did you know?

    5.8% more UC Irvine students listed Jimmy Eat World than Linkin Park.

    8% of male students have conservative political views.

    4% of male students have very liberal political views.

    44 people have birthdays tomorrow.

    2734 students poked each other today.

    4.1% of UC Irvine loves to watch Finding Nemo.

    2 Billion for a marketers wet dream. I think its a bargain.
  8. $2 billion is cheap
  9. JA_LDP


    HAHAHAHA. As a sophomore at MSU, I can say without a doubt how pointless facebook is. Just about every single person I know has a facebook. I do not. Very rarely does someone ask me if I have facebook. In class, for team projects or study groups, I have never been asked if I had facebook. They ask me for my phone number and email. All I ever hear are people complaining about how the site is always down and it's slow and just all around sucks. Yes, it is potentially important for corporations, especially if it goes global, but it's just a college fad at saturation point in America like the mock LIVEstrong wrist bands, the iPod, Ugg boots and North Face Jackets. (especially now that high schoolers can get on facebook) Like those 4 things, the hype and rush to get facebook is over (at least in the US) and students are finally realizing that it is not that great. I know several kids that have actually closed their accounts in the past few months. Apparently when it first came out, they didn't allow you to do so.
  10. Well then I stand corrected. But I'm must say that its rare than anyone ever asks for my phone number in class. Even when they do I just tell them to find me on facebook since my cell number is shown anyways. I resisted facebook for a while but I finally joined and it kind of took over. I had the mindset that people should talk less online and go outside and meet real people once in a while. I use facebook now as my primary from of communication with people that I dont see everyday and to get info on classes from other people. There are a lot of nifty little features that really set it apart from myspace and the others especially for college students. I'll assume you've had all your friends tell you how great facebook is so I wont go through that too. Its amazingly better then myspace where you find someone with 70000 friends and their profile pic is clearly a professional model photo that most likely isn't them.

    Oh and believe me I know all about the Ugg's. Here in Newport Beach every other girl is wearing Uggs and a mini skirt, they practically invented that here. BTW what's a North face jacket?
    #10     Apr 1, 2006