Yahoo in Talks to Acquire Facebook?

September 21, 2006 By Geoff Duncan

The Wall Street Journal is reporting that social networking site Facebook is talking about selling itself to Yahoo - for a price as high as $1 billion.

The Wall Street Journal is reporting (subscription required) that online, campus-focused social networking site Facebook is seriously discussion selling itself to Internet portal Yahoo for a sum which could approach $1 billion.

Although the social networking market is currently dominated by Fox’s MySpace, Facebook is considered one of the strongest alternatives to Rupert Murdoch’s online teen hangout, centering its attention on college students. Facebook’s visibility has increased significantly in the last two years following the implosion of social networking site Friendster.

Acquisition rumors have been bubbling for months regarding Facebook, with Viacom and Microsoft named as likely suitors. In early 2006, BusinessWeek reported that Facebook turned down a $750 million offer, holding out for the possibility of more money.

If Yahoo (or another entity) were to pay up to $1 billion for Facebook, it would make the $580 million Rupert Murdoch’s News Corp. paid for MySpace in 2005 look like a very shrewd deal…and make NBC Universal’s $600 million acquisition of iVillage seem a little odd.

Showing 2 comments

Tim Stevens at 10:14pm 21st September 2006 Wow, that is amazing. A billion is a TON of money for a site like that imho. I just can't believe that they'd be able to make back that money in 5 years time, not even a fraction, but who knows.
Ian Bell and Dan Gaul at 9:51am 21st September 2006 Wow, $1 billion dollars...that is amazing. Look at the demographics though. Young, educated, impressionable. This is a fantastic audience for Yahoo!. But at the college age, are they too old? I would guess that MySpace targets a younger and even more impressionable audience.