Facebook, having turned down at least one verified $1 billion buyout offer, is now saying they aren’t for sale. CEO Mark Zuckerberg and board member Peter Thiel aren’t stopping there, either. They’re also saying the company may build towards an IPO, and is worth at least $8 billion today.
Mark Zuckerberg:
We are not necessarily focused on what the exit is going to be - whether it’s selling the company or an IPO or when that’s going to be,” Zuckerberg said in an interview. “But we obviously think that there’s a lot of potential to keep growing.”
Peter Thiel:
“It’s going to remain an independent company,” Thiel said in an interview last week. “The plan is to actually build it, maybe at some point take it public, but definitely not to sell it.”
In July, the messaging coming from YouTube was nearly identical:
“Right now we’re just concentrating on proving the best user experience possible,” [CEO Chad] Hurley said. “We have no plans to sell.” As for an initial public offering, Hurley said, “If we have an opportunity to go public in the future that would be very exciting for us.” He also brushed aside reports that the value of the company jumped to $1 billion from $600 million because of his appearance at the Allen & Co. confab. “We’re not even focused on that,” he said. “There’s a lot of people talking about that in the blogs and in the media. A lot of this is news to us.”
YouTube sold to Google for $1.65 billion in October, two and a half months later.
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@36 - that’s the understatement of the year. What I can’t wait to see is what kind of traffic all these web 2.0 sites actually get once there are real analytics tools that are actually really accurate. there was a recent business week story that said NONE of the analytic tools are pulling in the right numbers - and that things like ajax, video, etc. are and will continue to affect it even more so as they’re more widely deployed.
I think we’ll find a lot of the sites out there aren’t getting the kind of traffic we think they are.
As far as it being a bubble, I was around last time. There were companies highly overhyped (some of my clients never brought products to market yet were heavily pitching them as if they existed), investments and VC going into things people scratched their heads wondering why, and hundreds of people starting identical companies to existing ones and few people actually really making money. Kind of what we’re seeing right now.
I used to think these guys were idiots. Now I think they’re brilliant. Every time they throw out a crazy, unrealistic valuation, everyone stops, blinks, and says,
“No way! it’s only worth 20% of that.”
First it was 20% of $750M, then it was 20% of $1B, then 20% of $2B, now, 20% of $8B.
Pure genius. I’ve never seen a bubble played so well. I think they refer to this negotiation tactic as “anchoring”…. I’ve just never seen it done so publicly, or so effectively.
What’s it reallty worth? Not nearly what they want. But who knows? (See, I just did it myself!)
@Drama 2.0, I agree with you that Facebook doesn’t have anything special. Its biggest problem is that its user base is fickle. The hottest social networking site of today will be old news tomorrow. People can switch on a whim. It has always been that way. A site like YouTube on the other hand has a strong grip on its users, and although there will always be many YouTube competitors, it will be very difficult for any of them to achieve the same reach. It may take a competitor 5-10 years, whereas Facebook could easily be conquered by another social networking site within a year (just like MySpace killed Friendster and YouTube killed MySpace, reach-wise).
I don’t see the comparison between YouTube and Facebook, other than the fact they are/were both high-profile, high-potential companies that are difficult to value and fun to speculate on. After all the costs of a YouTube acquisition (IP infringement, monetization challenges, etc), YouTube is still far and away a more valuable property - the next generation of video and entertainment content, created by users and distributed over TCP/IP far exceeds the value from just another social networking site. Comparisons of the two seem irrelevant at this point.
I don’t know which company is more deserving of having its CEO thrown into an insane asylum… Yahoo for offering this incredible amount of money or Facebook for saying NO.
Jon
bubbbbble…..do anyone care classmates.com….same thing will happen to facebook tomorrow….other than ads there is no business model here, ads will always fly to next hot thing!!!
it’s a good thing that facebook is on their own and can survive on their own (for now). compared to other networks such as friendster, hi5 or myspace, I feel that facebook has a great interface, and a clean one at that. no need to get microsoft or googlised!
In response to Drama 2.0’s comments re FB I totally disagree with the latter end of what you say:
1) FB does have uniqueness from a technical perspective. Which other social networks allow you to post an unlimited number of photos? Integrate with your blog? Provide you an activity news feed on your hompage? Let you share videos? The list goes on, FB is miles ahead of any other social network out there.
2) The “uncustomizable” user interface is not a disadvantage but a huge huge advantage - I am yet to meet someone who does not think FB’s UI is great and easy to use. They have no need to make it customisable because they are not MySpace - people do not choose either MySpace or FB, they use both for different things. My school friends (whom I lost touch with once I went to college) were all on MySpace, in fact pretty much the whole school (hundreds of people) were all on MySpace. In the last two weeks they have all, and I mean ALL, come onto FB but they still use MySpace - just for a different purpose.
People don’t use FB to express their individualism or identity, they use it to stalk their friends and hot girls/guys and right now FB provides the best tool to do exactly that.
I agree with all your points re FB’s expansion into other non-college markets though.
To sell or not to sell?
That is a great question that everyone has an answer for.
If you take a vote, I am sure over 99% of the people will take the $1 billion buyout price that Yahoo offered to Facebook. But 99% of the people would not have started Facebook at the time Mark Zuckerberg did or even well after that.
We might have a different opinion if we were in Mark Zuckerberg or Peter Thiel’s position. Mark may be young but certainly has achieved a great deal. I admire anyone who dares to be an entrepreneur whether he or she is successful or not.
Cheers to all the entrepreneurs out there!
I always wonder where some of these companies come up with their valuations i mean put a dart board up? Or last big internet acquistion had X amount of daily page views and sold for Y. So since we have Z amount of users Z*(X/y) = WE WILL BE RICH…
$8B? Come on?
What’s the right price? It is the price that a buyer is willing to pay… not what seller is asking for… MZ can ask a price of $1B, $8B or even $80B… can he find a buyer (including going public) for that… like any other investment the real game is in the TIMING. Right timing you may get $8B, wrong timing $8B may go down to $8M or even 0 (remember Asera, PointCast, tulips, and many others)…
on the other hand, the guy is in low 20s… let him take chances… either way it will be a good learning experience for him and one more circus for us…
Has it occurred to anyone that although they have been talking to companies about being purchased that maybe no one is willing to actually pull the trigger?
There’s nothing to say that a real offer was in place to be turned down. That’s the one specific piece of information that I consistently DON’T hear.
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