Facebook On The Block

conq writes "BusinessWeek reports that Facebook has turned down an offer for $750 million and is looking for 2 billion dollars. The article speculates that one possible suitor would be Viacom. From the article: 'A Facebook deal would help Viacom founder and Executive Chairman Sumner Redstone fend off a growing challenge from News Corp. The media conglomerate run by Rupert Murdoch has poured enormous resources into the Internet during the last year. It acquired social-networking pioneer MySpace.com last year for $580 million.'"

The internet bubble is back in force!

[mcguyver]

Sure, its' alexa ranking is 62 but $2 billion for a site created two years ago? WOW! You would think a billion worth of investment into engineering and marketing could easily recreate facebook.

Re:Dot com boom days?

[generic-man]

Facebook features a userbase of millions of sticky eyeballs which can be readily monetized using contextual advertising solutions that transcend the superficial and target the user's behavior.

For example, they use their users' Google tracking cookies to determine which web sites they visit. Facebook can then deliver targeted advertisements that result in a very high clickthrough percentage relative to ordinary bannervertising.

Facebook has also enabled rich media advertising for those who have tired of the traditional text and graphical media. A vibrant, full motion advertisement produces far more revenue and recognition.

Re:The new business model.

[Tweekster]

Actually it has a lot of income....it is called relevant advertising. That is why if you put your favorite movie as fight club, a poster store (and ad) for fight club posters will show up. If all websites had that sort of advertising people wouldnt be so annoyed by banner ads.

Social Networking Backlash

[bryz]

2 billion dollars? 750 million and they turned it down? This is the very cause for the Social Networking Backlash Techcrunch covered [techcrunch.com] like snubster.com [snubster.com] and isolatr.com [isolatr.com]

The problem with their thinking

[tansey]

So here's what companies see when the learn about sites like Facebook or MySpace: - Huge number of people - Vast majority are under 25 - Rapid word of mouth and hype spreading Now they think to themselves: "WOW, it's just like a TV show that gets millions and millions of teenage viewers---imagine the advertising potential! We'll make a fortune!" Unfortunatly for them, they're wrong. Commercials and product placements on TV are wildly different from those on the internet. TV requires you to watch them, and things can be soaked in subliminally with relatively little effort on the advertiser's behalf. Why is this? It's because people's attention is focused on what's going on, and the advertisements just slip in there most of the time. It's a fairly benign form of advertisement if you're engrossed in the program. Websites like Facebook on the other hand would require advertisements to distract the users from what they want to do. Banner ads and flash animations don't blend into webpages like a race car driver wearing 800 different brand names or a supermodel drinking a soda on TV. All internet ads do is to cause frustration and resentment among the users towards the product. So, while I'm sure advertisers wish that they could keep the same strategies and ideas that they have been using in TV, film, and radio for the last 100 years--sorry, you can't. The internet doesn't work that way. --- Just my 2 cents.

Re:No it can't

[notreallynas]

And when I was in school everyone was on friendster.com. That service sniffed the $$$ and went to hell too. If all it would take to throw off facebook is a new innovative feature that would enthrall the masses, don't you think $2B would be better spent developming that?

Re:oh brother

[Jahz]

Before you are so quick to judge, try and look at it from a bussiness point of view. For a multi-national conglomerate, sites like Facebook are invaluable. Consider that hundreds of thousands (millions?) of America's college-age youth have volunterally registered themselves (and their entire social network) on this site. They've itemized everything they like, and everything they hate, and matched it with detailed geographic and demographic information.

A quick glance at the constantly updated Facebook stats page showed me that the top 5 television shows "watched" by college students are Family Guy, Grey's Anatomy, Friends, The OC, Simpsons, respectively. At my school the list differs on on Friends, which is replaced by Fox's 24. If I had to make a list of the shows my friends here watched on a regular basis, it would pretty much be the same. How much does Nielsen make from providing such information??

I used Television as an example, but Facebook collects stats on many other things, such as popular movies, music and more. All of these stats are specific to the campus level, i.e. a very small geographic area. Even more, you could even tell what high school/hometown each student is from, when they were born, if they are single, male or female, etc etc.

My Point: 2 Billion is very high, but don't underrate the value that this site could provide to a (multi)national marketing team.

Re:Why facebook is better than myspace

[Anonymous Coward]

Right on. As a recent college graduate I can also attest to the value of the site. However, one major advantage that facebook has is the ability to figure out who you hooked up with the night before. If you can just vaguely remember what she looked up then you don't even have to remember her name!

We actually wanted to create a site at our university somewhat like this, but the privacy concerns wouldn't allow us. We had a couple of kids together that thought about doing it independant and now with the numbers $750m and $2B floating around, my regret is greater than ever.

Re:oh brother

[neersign]

especially the trend setting popular kids (who are often the most addicted)

this is because they are the only ones who care who has more friends than them. Personally, i think myspace and thefacebook (and stretching it more to deviantart) have potential in theory to be great websites to allow friends to find long lost friends, share ideas, and find new friends, but in actuality they become popularity contests.

and yes, i have accounts on both myspace and thefacebook.