Yahoo Offers $900 Million for Facebook

By Ed Oswald | Published September 22, 2006, 11:09 AM

While many may have scoffed at the price News Corp paid for MySpace -- $650 million -- another social networking site may be close to selling itself for even more money. With only a fifth of the traffic of MySpace, Facebook has been offered over $900 million, an offer that is still being considered.

The Wall Street Journal reported in a front-page story Thursday that talks had restarted with the search engine, and a deal could be close. Facebook executives, including its 22-year-old CEO Mark Zuckerberg, have already held talks with Microsoft, Viacom and Yahoo previously.

Zuckerberg has indicated in the past that the site would consider going public or sell itself to a larger company, however "it's not our priority." However, in the world of the Web, where sites can gain popularity and flame out just as quick, Facebook's window of opportunity -- and when it would be the most valuable to suitors -- may be closing.

Changes planned to the site could also help lure eyes away from MySpace. Whereas the site initially would only let college students with a ".edu" e-mail address join the site, it later allowed high-school students to join, and then employees of certain companies. It now plans to offer open registration soon.

Such a move may be crucial - MySpace has about 50 million monthly users, and that number is increasing at an astronomical rate. Meanwhile, Facebook only has about 10 million monthly vistors, and while it is increasing, it is nowhere close to the rate of its competitor.

Yahoo initially offered $1 billion for Facebook back in the spring of this year, however those talks fell through. Then the search engine faced some financial troubles, and traffic data indicated that the site's growth rate was not up to the standard Yahoo was looking for. The offer dropped down to about $800 million in July, and it was rejected.

Finally, within the past couple weeks Yahoo offered about $900 million, and that number was confirmed by sources for both the New York Times and Wall Street Journal. Talks are still ongoing.

Neither Zuckerberg nor spokespersons for Facebook would comment on the status of the negotiations.

Comments

yahoo can kiss my ___ They are buying everyone. Can't they just stick to there own thing. Leave others out of it.

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Wow great. I saw same news of www.yahoofanclub.com forums too. I think Yahoo is trying to buy around most of the companies to increase its Share value.

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I hope that they don't ruin facebook, I kind of like it in many ways...

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Interesting. Reckon Yahoo's trying to be the biggest online community, with flickr + Facebook. However, the minute Yahoo buys Facebook, I am assuming it will go the way of myspace/orkut and become stalker-ish...

However, the new Privacy measures (including allowing me to hide my pic) does give me some hope...

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The only way* that anyone would offer $900 million for Facebook is if they thought they could get it back, plus some extra profit.

Does Facebook seem likely to be able to recoup such an enormous outlay?

* - Actually, there's a second reason. The person making the offer could be an idiot. ;-)

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Seems like he understands business if he can get 900 million for facebook

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true but if he had done it differently im sure he could have gotten more than 1.0 billion

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facebook has gone downhill since mark zuckerberg put in the news feed, if he was smart he'd sell it now as facebook keeps digging its hole deeper. obviously harvard didnt help zuckerberg understand business as he has completely ruined facebook.

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The way internet buisness spending has been recently, 900 million isnt so bad for a big site like that.

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