Six Months Ago: 10 people who don't matter
Mark ZuckerbergFounder, Facebook In entrepreneurship, timing is everything. So we'll give Zuckerberg credit for launching his online social directory for college students just as the social-networking craze was getting underway. He also built it right, quickly making Facebook one of the most popular social-networking sites on the Net. But there's also something to be said for knowing when to take the money and run. Last spring, Facebook reportedly turned down a $750 million buyout offer, holding out instead for as much as $2 billion. Bad move. After selling itself to Rupert Murdoch's Fox for $580 million last year, MySpace is now the Web's second most popular website. Facebook is growing too - but given that MySpace has quickly grown into the industry's 80-million-user gorilla, it's hard to imagine who would pay billions for an also-ran.
Today: Yahoo’s “Project Fraternity” Docs Leaked
At Yahoo, the long running courtship has lasted at least as long as this year, and is internally referred to as “Project Fraternity.” Leaked documents in our possession state that an early offer was $37.5 million for 5% of the company (a $750 million valuation) back in Q1 2006. This was rejected by Facebook. Things really heated up mid year. Yahoo proposed a $1 billion flat out acquisition price based on a model they created where they projected $608 million in Facebook revenue by 2009, growing to $969 million in 2010. By 2015 Yahoo projects that Facebook would generate nearly $1 billion in annual profit. The actual 2006 number appears to be around $50 million in revenue, or nearly $1 million per week. These revenue projections are based on robust user growth. By 2010, Yahoo assumes Facebook would hit 48 million users, out of a total combined highschool and young adult population of 83 million. Our sources say that Facebook flatly rejected the $1 billion offer, looking for far more. Yahoo was prepared to pay up to $1.62 billion, but negotiations broke off before the offer could be made.
At Yahoo, the long running courtship has lasted at least as long as this year, and is internally referred to as “Project Fraternity.” Leaked documents in our possession state that an early offer was $37.5 million for 5% of the company (a $750 million valuation) back in Q1 2006. This was rejected by Facebook.
Things really heated up mid year. Yahoo proposed a $1 billion flat out acquisition price based on a model they created where they projected $608 million in Facebook revenue by 2009, growing to $969 million in 2010. By 2015 Yahoo projects that Facebook would generate nearly $1 billion in annual profit. The actual 2006 number appears to be around $50 million in revenue, or nearly $1 million per week.
These revenue projections are based on robust user growth. By 2010, Yahoo assumes Facebook would hit 48 million users, out of a total combined highschool and young adult population of 83 million.
Our sources say that Facebook flatly rejected the $1 billion offer, looking for far more. Yahoo was prepared to pay up to $1.62 billion, but negotiations broke off before the offer could be made.