Yesterday’s Wall Street Journal article reporting Yahoo’s potential acquisition of facebook, a wildly popular social networking site for college students, set the blogosphere afire with speculation and debate. A myriad of “people familiar with the matter” confirmed rumors that the terms of the deal may approach the 1 billion dollar range. Though facebook’s traffic doesn’t quite compete with its rival site, News Corp-owned MySpace, it’s highly loyal user base and desirable demographics could give Yahoo a much-needed entry point into the social networking arena, as well as access to a younger set. Given Yahoo’s recent announcement of poor online advertising sales and dropping stock prices, a risky buy like facebook could be a major play for the industry giant who is losing more and more ground to Google.
A two and a half-year-old start-up founded by 22-year-old Mark Zuckerberg, facebook has seen its numbers skyrocket steadily since Zuckerberg launched the site – mostly for kicks – out of his Harvard dorm room before later dropping out to puruse life as a full-time entrepreneur. However, with a membership of only 9 million users compared MySpace’s 50+ million, facebook doesn’t present Yahoo with the same revenue potential that News Corp and Google are seeing from their relationships with MySpace.
Tech bloggers love arching their backs, pulling out the claws, and getting catty about facebook, so it’s no surprise that the blogosphere is going to town asking itself a) is facebook worth that kind of cash and b) would this move really fix Yahoo’s problems? These questions are titilating enough to inspire Om Malik to post a poll on his blog, asking folks to vote on what they predict will happen.
To sell or not to sell, that is the question Mark Zuckerberg is asking himself right now, and college students, geeks, and VCs alike are on the edge of their seats.
