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Summary:

So I was wrong, and Mark Zuckerberg was right to not sell his company for 3/4th of a billion to Yahoo. The prices since then have only gone up – even if they are prices of perceptions. Microsoft has been linked to them with a price […]

So I was wrong, and Mark Zuckerberg was right to not sell his company for 3/4th of a billion to Yahoo. The prices since then have only gone up – even if they are prices of perceptions. Microsoft has been linked to them with a price tag of $6 billion. Max Levchin, founder of Slide said that Google or Yahoo will have to sign a $10 billion-check if they wanted to buy Facebook.

Dave Winer says who cares what the price tag is – $8 or $10 billion, because Facebook is a company that enables “fewer networks of friends.” And on top of that there has been a lot of talk of a Facebook IPO, because of a video that got taken down, a job posting and well, a summer sun-induced delusion that has swept the valley.

The Fortune iMeme conference was no different. Everyone was talking about Facebook. I was breakfasting with another social network CEO while Jim Breyer was talking about Facebook on a VC panel along side Mike Mortiz of Sequoia Capital. Barrons’ Tech Trader Daily blog did a nice recap of the panel, and here is what Breyer said:

The company will do well over $100 million in revenue, and profitable, and significant EBITDA positive this year.

When asked what would be an impetus to sell Facebook, Breyer said part of it would be price, and then went on to say that they sold some of their companies too early. He gave the example of Perabit.

So is he saying that they want to go I-P-O with Facebook? I think yes, unless of course someone shows up with $10 billion. Given that I was wrong on the price tag the first time, I am going to shake my head quietly and head to the hills this weekend.

  1. When these companies talk about IPO, means they are for sale & already in negotiations. Remember YT IPO comments?

    Let’s see if the $100M revenue card is played correctly or if it is just a negotiation tactic.

    If FB can’t attract ads and once FB fad/craze dies down, let’s see if it can fetch even few hundred millions.

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  2. Yup, it’s a head shaker. Tech uncertainty seems to breed bizarre speculative valuations. In Bubble 1 it seemed almost every startup was valued foolishly by VCs, where now they are gambling with modest startup funding and assuming they’ll lose most of the bets but win big on a few. Yet for “successful” companies like Facebook and YouTube that have made it through the first rounds of money and social acceptance the perceived upsides seem even higher than in Bubble 1.

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  3. $10B sounds like a lot, especially for $100M of revenue. That’s 100X top line which seems out of whack to me. I’d say a 20X-30X sounds more reasonable to me.

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  4. IPO: fact.

    Unless Zuckerberg receives a ridiculous takeover offer that no human being could possibly refuse (i.e. $10 billion perhaps), then Facebook will go public. It just makes sense. The company is still growing and does not need a larger player to take them under their wing.

    Cheers,
    Aidan
    http://www.MappingTheWeb.com

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  5. ok, if Max is saying $10B is the number along with others, then i think i get to say that i called this one about 3 weeks ago: http://500hats.typepad.com/500blogs/2007/06/facebook-world-.html

    but again, i’d be surprised to hear Facebook sold out before an IPO. why sell out when you can conquer the world? ;)

    • dmc
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  6. IPO is a lock for Facebook. They are in position to be the world’s premiere social network.

    Myspace = Altavista
    Facebook = Google

    =)

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  7. Keith Shepard Saturday, July 14, 2007

    10 billion >= Irrational Exuberance

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  8. They are electronic sheep herders, the only problem, they have no control over the sheeple or the fence…they will move to another site at the drop of a hat. I would not touch this company if I were microsoft…In fact, I hope google buys them for 10 billion…that would prove how moronic the web 2.0 bubble has become.

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  9. facebook shouldn’t sell, if only so we get to watch its singular rise continue.

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  10. I was one of the first 1000 users on Facebook and lived about a quarter mile from Mark when he started the site. My friend lived across the hall from him in a Harvard dorm. I have watched Facebook closely from the very start. IMO the new F8 platform will both help and hurt them. Sure, a lot of new applications have been developed for Facebook. But it closed the gap between Facebook and MySpace in terms of appearance. Most of my friends think profiles with applications appear cluttered. MySpace, Bebo, and the other networks will come out with their own platforms soon.

    If Facebook, MySpace, Bebo, etc, all have open platforms, then what really separates them? The header, footer, and default color scheme? The top widgets/applications will be made in versions for each network. Additionally, any new social network (i.e. Yahoo mosh) can come along with an open platform and instantly have 1000 great widgets that users can plug in. I would argue that this new movement towards an open platform has hurt Facebook more than it has helped, they just don’t realize it yet.

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