FACEBOOK made a stupid move.

Discussion in 'Wall St. News' started by S2007S, Dec 13, 2006.

  1. S2007S


    They didnt take the offer from yahoo at $1 BILLION. YAHOO EVEN RAISED its offering price to $1.62 BILLION...all I have to say is thats a stupid move for facebook. Facebook should take the money and ran far far far away. Wait, maybe facebook is greedy and wants even more. Im going to predict that facebook is worth less than $750 million in 12-18 months....

    Yahoo! Closing Its Facebook?

    By Rick Aristotle Munarriz (TMFBreakerRick)
    December 13, 2006

    Has Yahoo! (Nasdaq: YHOO) finally given up in its pursuit of Facebook? According to Michael Arrington's TechCrunch blog, the Web giant's so-called "Project Fraternity" may be in for a bumpy landing. According to leaked documents that Arrington has received, talks started earlier this year, when Yahoo! offered to buy a 5% stake in the company for $37.5 million.

    That seems to be a popular bite-sized morsel, since it occurred around the time that Google (Nasdaq: GOOG) paid $1 billion for a 5% piece of AOL. Facebook balked, and Yahoo! ultimately returned with a $1 billion price tag for all of Facebook.

    According to Arrington, Yahoo! was willing to go as high as $1.62 billion (again, another number apparently close to rival Google's heart, given its eventual $1.65 billion stock deal for YouTube), but talks broke down before Yahoo! could raise its offer.

    Given slower traffic trends in recent months at Facebook, perhaps Yahoo! should consider itself lucky. In its projections, Yahoo! had assumed that registrations would continue to grow at a healthy clip, and perhaps more importantly, that advertising revenue would skyrocket.

    In the document, Yahoo! claims that Facebook generated $0.26 in ad revenue for every 1,000 impressions. Yahoo! was assuming that it could prop that figure up to $3.77 come 2010, and $5.54 by 2015. Those are some perilously dangerous ledges from which to hang your hats, given that online advertising revenue per page may stabilize before then. It's also possible that a mad rush to populate Facebook with ads would send users scrambling to other walled-in social-networking sites.

    A deal may still happen, since Facebook remains valuable. However, social networking has been fickle. Remember when Friendster could command a king's ransom as the pioneer? Even News Corp.'s (NYSE: NWS) MySpace has shown some growing pains lately.

    Don't get too greedy, Facebook. And Yahoo!, don't take advantage of a less greedy Facebook. One site could use a sugar daddy, and the other could use the high-profile real estate. The deal still makes sense. Time will tell whether it makes dollars and cents, too.
  2. What reason do these guys have to not sell Facebook?
  3. S2007S


    I have no clue, if I was facebook I would sell into this web 2.0 hype.
  4. I still say youboob was a steal at less than 20 billion.
  5. The company is still being managed by a 22 year old techie.
  6. True, but does he really want to actually have to do something for the rest of his life?
  7. I cannot wait until the day down the road where he is in his small little house with Ikea furniture and a boring IT job somewhere making decent money to support his family and he is talking with his 2 teenage kids about how he is going to borrow money for their college and he pauses and says "You know kids, at one time Daddy turned down $1.62 billion for that company I use to run which was closed down. Wasn't that silly?"
  8. LOL
  9. Don't laugh so hard. For every one like that there are 1000 wanna be traders wasting their time.
  10. Drambuie


    Probably 100,000 traders.

    Zuckerberg did more in 2.5 years than optioncoach could achieve in a lifetime.
    #10     Dec 15, 2006