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Facebook for Sale; But $2 Billion?

Posted by: Rob Hof on March 28, 2006

So says our Steve Rosenbush in a story today. Apparently, the social-networking site turned down an offer for $750 million. Even that’s way more than the $580 million News Corp. paid for the much larger MySpace last year.

Kudos to Facebook founder Mark Zuckerberg. But $2 billion? I suppose someone can make the math work out, but the mini-bubble in consumer Web services seems to be getting even more out of hand.

Update: Om thinks they should have taken the $750 million, given stagnant traffic figures. So do many of the commenters on his post. I dunno that Facebook automatically loses to MySpace, though. At the Web 2.0 conference last fall, a panel of teens late in high school or just into college was asked where they hang out online—MySpace? Nope. Facebook. But the one sure thing is that these audiences are fickle.

Reader Comments

Gualberto Diaz

March 31, 2006 2:34 PM

I don't know if it's really being fickle per say. I think the target markets are different. Facebook is directly catered to the college and recently high school crowd. What I think holds Facebook back at the moment is the site's inability to be useful to alumni at the moment. I think this could be fixed rather easily though. Myspace caters more to an artistic crowd that wants more freedom to do with their page whatever they want. They both have their pro's and their con's, but regardless, both are providing companies with an outlet to a specific set of individuals in a specific age range.


April 8, 2006 10:42 PM

I think the price involves a premium because of the generally accepted fact that Gen Y-ers are not very receptive to mass marketing and facebook is VERY popular with university students (and recently high school students). Facebook is easy to use and the advertising is not being pushed in your face (myspace on the other hand is very commercialized).

As for alumni, they can have access to the site as well if they have access to their school email. At most schools, if you graduated prior to free email accounts being given to students, you can contact the alumni relations and they'll set one up for you.


April 10, 2006 10:21 PM

I think the personalized web space craze is not just a fad, it will become a staple to every who access' the internet. As for facebook asking 2 billion for control of its site is just absurd. Some would say that the $580 mil purchase of MySpace last year was a steal, especially in terms of the advertising revenue. Yet facebooks advertising scheme is not only less effective but also less evident to the consumer.
I say Facebook creater Mark Zuckerberg should have taken the $750 mil offer or at least reduce the asking price by 50%. It will be very interesting to see if any corporation will invest so much in a site dedicated to a specific targeted age group.


April 11, 2006 2:44 AM

Being an IT man myself, I take pride in my geeky accomplishments. Could it possibly be that he simply doesn't want to see his "baby" go? Maybe in his mind $2 billion is what it will take for him to make peace with seeing his work become potentially hacked up and commercialized. Just my 2 cents.

some kid

April 11, 2006 8:26 PM

RaiderRedHead may have hit it on the button, as a user of both facebook and myspace, I see facebook as a far superior investment. Facebook doesn't seem to face the number of pedophiles and pornographers that you get on myspace because of that I believe it is a much safer investment. Two billion, idk, but I think that RaiderRedHead is probably right, Rosenbush isn't ready to give up Facebook, yet.

Then again I'm only 18, what do I know.


June 23, 2006 10:00 PM

I def. think that facebook is superior because it is not open to everyone in the world like myspace. Facebook is for the most part college kids who want to interact with others like them, their friends from high school and the guy/girl they met at a party. Myspace has been corrupted a little by companies who adopt a profile to solicit to people. If solicitations begin on facebook people will not use it anymore. $2 billion is a perfect number. I hope it is too high for anyone and the people in charge now stay put.


July 13, 2006 2:23 PM

I agree that the $2 billion should keep the site from being too commercialized. No one wants to go check their facebook and have a bunch of advertisements continuously popping up. If facebook becomes anything like myspace, half of the college students will not use it. Facebook is meant for 'students' and anyone affiliated with the school system. It also eliminates the 'different people/ weirdos' that may potentially be pedophile material. I think facebook should not change at all. If they want to solicit the site that bad, then they should pay! Good job Mark!!!


August 8, 2006 6:47 AM

I think Facebook really should have taken the $750 million. There is no way any website is worth $2 billion. Facebook would never generate a total revenue of $2 billion so why pay that much let alone $750 million.
Myspace is not even worth $580 million


November 12, 2006 8:58 PM

The facebook for sale for $2 billion is just a crazy amount, and now with google also in the running with yahoo, it will be interesting to see who ends up owning the social networking site.

Ben Knowles

October 25, 2007 1:14 PM

Wow, this report couldn't have been farther off base.....

Imagine that might be a sign that this fella has a bit of smarts about him eh?

If he had sold at $750M, would have done himself out of $14.25B some would say a year and a half....worth the wait!!

summer is here

April 26, 2008 7:35 PM

FACEBOOK - is quite boring to look at - I not impressed with it at all - Why they didnt take the 780 million?? Or take 1/2 a billion and 10% of the company earnings per year. Hey Mark retire.. enjoy life. Were only here a short time. Let someone else work for you. 10% earnings would be a great payout if you sell to someone who knows what there doing!! lifes short enjoy..


February 4, 2009 7:31 AM

The price for sale is out of anybody's mind; I agree with the note and everybody here. $750M would be more than fair, but when greed comes in... Well for any facebook users the best advise it to remain at all instances low profile, this is, no personal info, at the end, who ownes what each FB user claims to be of them when at the end nobody read the fine print when we joined such network? My point here is not just for the economy but for the privacy!


March 17, 2009 10:32 PM

Facebook is for everyone not just people who study,50 year olds use it,everyone can use it,BUT will they do the same if they have to pay for its use?i wont.i personally think its priceless,start charging,it becomes another luxery in life,someone offered me £750,000,000,i'd say where do i sign,first sign ov subscription people walk away in droves,a new site will emerge and the circle starts again.


March 27, 2009 2:47 PM

i have witnessed the growth of this site and can say that it is a worldwide phenomena. and now a wider demo is involved. but, at the end of the day it's just an enhanced yellowpages (i get about 3 every year). maybe if it becomes a paid service, it will allow another genius to come up with a better solution. gratis. remember Hotmail...


May 2, 2009 2:14 PM

Hello i am entrepuer i own facebook and i created the company from scatch.
if anyone interested in buying it i sell i for $900 million

Margaret Clarke

July 29, 2009 3:18 PM

I agree with some of the comments here, but those looking only at the business model are so uninformed. the owner is so involved, and the site is open and used by all age groups. I use it to stay in touch with work colleagues, with extended families, with friends and neighbours from previous addresses. It is a much larger entity than a business. And the market for users is much larger than is being discussed.

Richard Branscum

September 25, 2009 7:52 AM

I will say to you that I believe 2 billion is truly absurd, I however would give the 750 mil. It will show to be a bargain. I am a 45 yr old that has recently been exposed to facebook, and realized I have at least 50 percent of my alumni are active members. There are more joining everyday. I have found people that are computer literate are all going to get involved.
If I had the monetary means to purchase Facebook I would give a smooth 1 billion. It would need a few kickers and a smart ad campaign to go into every household in the computer literate world. That is not even counting all the smart phone business that lies ahead. Come on someone with the means I need a partner. I can assure you in the very near future we would not only get our money back but make 10 fold.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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