Facebook turns down $750M acquisition offer

[mason55]

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btw, where do I find out about these "underground internet trends"?

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reading lots of blogs and news sites that aren't really targeted towards your average person. i would say you actually have to care about it or you'll find most of the stuff pretty boring. there are lots of things that I couldn't even tell you where i pick them up but they just seem to be sitting in my brain from all the random reading on the internet i do. for example i heard all the stuff about the google ads (ie the lawsuits, the fact that they could be switching to flash and interstitials) through the digg.com podcast about a month ago. it's not really like you can go to just one place to hear all this stuff though, like i said, you actually have to care.

[yasher]

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he should have taken the 750 mil.

no one knows what to do with these web2.0 sites, they're just buying them because they have traffic and online advertising is once again seeing tons of money being shoved it's way. that's going to change though.

google is about to take a huge hit when they announce all the clickfraud lawsuits they'll be settling and that they're going to be pushing rich content advertising (interstertials and flash banners and hovers and all that other stuff you block with firefox). when the market leader's advertising business model collapses, that's surely going to cause yet another online advertising crash.

once that happens, facebook and myspace and flikr and blogger revert to being massive content sites with no real way to generate signifigant revenue. by the time advertising online is in vogue again, facebook will no longer be the hot thing.

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how do you know this? who are you? what do you do?

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kane -
i didn't write this but this is all pretty common knowledge for people who keep up with the trends of the internet underground.

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Then it would definitely be common knowledge for a guy fielding 750M offers on his site, wouldnt it?

I doubt we as internet underground trendsters are as in the know as we think we are.

Just a thought.

[mason55]

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he should have taken the 750 mil.

no one knows what to do with these web2.0 sites, they're just buying them because they have traffic and online advertising is once again seeing tons of money being shoved it's way. that's going to change though.

google is about to take a huge hit when they announce all the clickfraud lawsuits they'll be settling and that they're going to be pushing rich content advertising (interstertials and flash banners and hovers and all that other stuff you block with firefox). when the market leader's advertising business model collapses, that's surely going to cause yet another online advertising crash.

once that happens, facebook and myspace and flikr and blogger revert to being massive content sites with no real way to generate signifigant revenue. by the time advertising online is in vogue again, facebook will no longer be the hot thing.

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how do you know this? who are you? what do you do?

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kane -
i didn't write this but this is all pretty common knowledge for people who keep up with the trends of the internet underground.

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Then it would definitely be common knowledge for a guy fielding 750M offers on his site, wouldnt it?

I doubt we as internet underground trendsters are as in the know as we think we are.

Just a thought.

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lol... yes anyone who is setitng the trends would obviously know this. but kane replied like the only way you could know any of this is to be on the inside of all this stuff. i was just pointing out to kane that the post about google ads wasn't nearly as revolutionary as he seemed to think and that it is, in fact, common knowledge.

[Dominic]

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what exactly is facebook, and how do they generate revenue to make it worth a billion dollars??

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It is a networking site for college students, where they can post their picture, some biographical information, join groups, communicate with each other, etc.

It is estimated that 85% of the students at schools where facebook is available are members, and of that 85%, approximately 60% log in on a daily basis.

Here is the tremendously large lists of colleges that are supported.

They make money in two ways. The first is that users can post bulletins, which cost $5 for 10,000 views. The second is that corporate sponsors have banner ads and some sponsored groups.

Facebook is worth a billion dollars because it is more or less ingrained in current college life. "facebook" has become a verb around college campuses much in the sameway that Google or Xerox have.

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thanks. and i thought i was still cool because i actually knew what MySpace was.

jesus, i'm old.

[hedxcold]

i think one thing that made facebook so popular was "the wall" feature. people just liked being able to leave comments like that. i'm sure there were other reasons at first, but that sticks out to me

also myspace lets you view everyones picture, even if you're not in the network but just have an account, while friendster doesn't. i think thats a big reason it took off. of course, like facebook i'm sure there are other reasons

[lapoker17]

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google is about to take a huge hit when they announce all the clickfraud lawsuits they'll be settling and that they're going to be pushing rich content advertising (interstertials and flash banners and hovers and all that other stuff you block with firefox). when the market leader's advertising business model collapses, that's surely going to cause yet another online advertising crash.

once that happens, facebook and myspace and flikr and blogger revert to being massive content sites with no real way to generate signifigant revenue. by the time advertising online is in vogue again, facebook will no longer be the hot thing.


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this is quite innaccurate. i believe you are misinformed. i don't doubt that you read this somewhere, but the same alrmists have been saying similar things for quite some time. those intimately familiar with the online media/marketing world know that cpc advertising is going nowhere. it is the most important advertising development in decades, and citing click fraud as a major deterrent is silly as it is simply a minor part of the cost of doing business (for advertisers).

[diddle]

take the [censored] $750 million

[talentdeficit]

lapoker,

google has just settled one lawsuit (of hundreds) for 90 million. mark cuban, a billionaire who knows a little about internet trends (especially when to get the [censored] out) estimates 50% of google's revenue is from clickfraud. the washington post puts it at 35%. motley fool thinks it's 45%. yahoo does a little better than google, but estimates put 20% of their advertising revenue in the clickfraud category. microsoft is entering the market, probably just to [censored] with google.

how can this not effect the value of companies with no product on offer other than pageviews?

[Evan]

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how can this not effect the value of companies with no product on offer other than pageviews?

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These companies are not being valued on the revenues they have today. Essentially they're options valued by weighting the prospect of a huge idea coming along. The revenue growth implicit in Google's stock price makes it pretty clear that the market thinks it will find new ways to make money in the near future. If you think the stock price is justified without that assumption then you're managing to be more naive than the people somehow think the price is justified WITH that assumption.

[El Diablo]

mmbt,

The fact that facebook took $500k from Thiel (a PayPal founder and very active angel investor) and $13M from Accel (a well known Sand Hill VC) is irrelevant wrt KKF's question.

Facebook, Friendster and many other companies in these areas (web 2.0/social networking/blogging/etc) only took significant funding AFTER reaching critical mass. Yes, with more money, they can expand on that critical mass faster. But it takes very little money to get a site going and make it successful. The types of sites that are selling for tens or hundreds of millions of dollars can easily be created for less than $10,000 and many (perhaps most) of the successful "web 2.0" companies were started with far less than $100,000. Many of the companies that Yahoo and Google have been snapping up recently fall into that category.