Facebook: Too Late For $750 Million?

42 Comments

Facebook, the college social networking site, and a phenom I wrote about for Business 2.0 is apparently on the block. Business Week reports that the company is looking to get close to $2 billion, and had passed on a $750 million offer. Well, I think they should have taken the $750 million. Why?

Just look at their Alexa stats for past three months. They are stagnating like my new year resolution to lose 50 pounds. Over past three months, the daily pageviews and the daily reach are range bound, and the daily traffic trends are not encouraging as well.

From what I have heard is that the company is considering opening up its network to the non-core audience, aka young people who are not in colleges etc. I think doing so would be disastrous for the company. It would become yet another social network, which would get spanked by MySpace, which is still defying the odds, staying firmly perched in the stratosphere.

42 Comments

Jas

I wonder who can give better advice. If facebook had followed the advice in this article, would they be the company they are today. Was opening to non-core audience a bad step? In hindsight, no.

So then, who/how can the future be predicted?

Derek

i bet they are glad they didn’t listen you guys now that they are worth like 15 billion and sells a small 1.6% for $240 million lol to microsoft

Charl

How wrong was Om Malik with his post HAHAH.. I cant believe this is still up

Zuck has proved him wrong with EVERYTHING he said above

Joseph

Interesting discussion, but I think the Facebook owners are smart for passing on the 750 million. I think they could easily sell it for a billion, but any more than that is being greedy. I am still upset about the fact that Facebook has allowed high schoolers, because it lowers Facebook’s credibility. That is the big edge Facebook has over Myspace. Credibility. See with Myspace any spammer, webcam girl, hacker or 12 year old can join, but at least with Facebook I have to have a student email account to register. Facebook is much organized as well.

CaptainTO

Almost a full year later from this post, care to comment again on facebook’s trajectory over the last year? http://www.alexa.com/data/details/traffic_details?site0=facebook.com&site1=&site2=&site3=&site4=&y=r&z=1&h=300&w=500&range=1y&size=Medium&url=facebook.com

I know it is always tough to predict outcomes, but most should know by now that alexa graphs are a lot like stock charts, analyzing the mini trends can lead to inaccurate predictions. To look at these properly we need some sort of index value to remove the global variations in usage.

It seems the opening of the site has not caused a major decline in usage and their geographic expansion plans may counter any plateauing we will see in the US market.

Any comments on valuation? This site is actually profitable unlike many others.

Rick

I have to say I agree that they should have taken the $750m when they were offered it. Since that offer, their reach has gone down, and honestly the site isn’t all that I would hope it could be. There are so many competitors now coming into the arena that it will be a more fierce competition and nobody is going to be buying out these companies I would guess for several months:

Arefuge.com
Cyworld.com
Friendster.com
Facebox.com
Tagworld.com

and of course none of these compare to

Myspace.com

in terms of traffic,…

Someone will emerge a winner, possibly several people or possibly all of them, but the buyout prices will be nowhere near the $2billion they’re seeking.

ventureblogalist

do faceB or myspace use CPC? i have only heard of social networks using cpm. why not a hybrid or use cpc? i saw some usage stats that would suggest its because users are not leaving the site.

James

I have to agree with you. They are freaking morons for not taking the $750 million! It is very risky and greedy at least. Who is to say there won’t be another dot.com bomb? If the stock market starts to tank they’ll be wishing they would have taken the offer. If they do get the 2 billion they are looking for I consider them very lucky. Stupid lucky.

What I don’t get is why anyone would pay $750 mil in the first place? Why not just take say 50 or 100 million, hire a bunch of developers and come up with something better at a fraction of the cost? Eh…i simply don’t get it.

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