Summary: Mark Zuckerberg (pictured) started Facebook, a website that allows students to post pictures, create custom pages, and communicate, while in Harvard in 2004 (he since dropped out). By early 2005, the site had spread to other universities, and had 1.6M monthly U.S. visitors; today it boasts 9M, who spend on average an hour a month (an eternity in internet-time). Most of those users are young; they gather on the site to personalize their web pages, look for friends, and instant-message. Social networking sites such as Facebook have recently become big business as marketers have realized the access they offer to the sites' demographic: News Corp. (NWS.A) bought MySpace last year for $650M and in August, Google (GOOG) guaranteed MySpace a minimum of $900M in ad revenue over the next 3.5 years. Insiders say Zuckerberg has already held acquisition talks with Yahoo! Inc. (YHOO), Microsoft Corp. (MSFT), and Viacom Inc. (VIA). Now, say some, he is in serious negotiations with Yahoo to sell-out for close to $1B. Concerns: 1) Networking sites' users are a fickle bunch - sites can flame out as fast as they ignite. 2) Facebook management has been accused of sophomoric behaviour; Zuckerberg reportedly refused to meet with MSFT because 8 a.m. was too early. Facebook is debating whether to sell out or stay independent in the hopes of becoming another Google. Zuckerberg: "I would never say that at no point in the future would we go public or become part of a larger company... but what I would say is, it's not our priority. There's so much more to do here." Insiders say Zuckerberg holds a roughly 30% stake. Venture capitalists who funded Facebook include Accel Partners, who invested around $13 million in Facebook in 2005. Insiders say Facebook will soon top $100M in annual ad revenue, which is considered the minimum for a high-tech IPO these days. Read full article >
Related links: How a Facebook Acquisition Would Benefit Yahoo • Message from Yahoo's Warning • Facebook's User Experience Error, and Why Yahoo and Viacom Tried to Acquire It • WSJ: Facebook launches Election 2006 network • The Crimson White: Facebook becomes twisted tool for hate • eBay and Yahoo are Losing Talent to Smaller Internet Startups • Conference call transcripts: Yahoo! Q2 2006 . MSFT Q4 2006
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