When major companies emerge in the technology industry, there’s no indication of what may come of them. Will they go the way of Google and become an online powerhouse? Or will they go the way of countless other online properties that get sold off to the highest bidder? Either way, it doesn’t matter: in the end, somebody makes it big.
But when it comes to Facebook, not everything is so clear-cut. The company is huge, sure, but it’s also huge in a sector that’s dictated by fickle users that would gladly move to the next bigger, better, cooler thing at the drop of a hat. That said, it’s also a huge company that should enjoy around $350 million in revenue this year and has a (foolhardy) valuation of about $15 billion, according to Microsoft’s estimates.
On top of that, Facebook is also the world’s most popular social network even though MySpace still leads the US market, and as more users jump on-board each day, it’s becoming an increasingly valuable property.
But now, it’s time for Zuckerberg and the rest of his cronies to forego his faulty hope of an IPO and sell Facebook to the highest bidder.
Simply put, Facebook is at the top of its game. It’s enjoying exponential growth, its user-base is growing rapidly, and as it adds more advertising and investment deals to its offering, it’s quickly becoming a valuable online property. And as it becomes an even more valuable property, it becomes an even more attractive target for major companies like Google and Microsoft to acquire for billions of dollars.
And while some believe that the growth can last forever and selling now would mean that it gets out of the business too early, I think that mentality is what could see Facebook sell for $500 million instead of $10 billion.
Facebook is a generational platform. Just like AIM was the most popular social tool of the nineties in the US and MySpace was huge a few years ago, Facebook is the new king in the social space. Right now, it’s cool for high school and college kids to log on to Facebook, send messages to each other, and play the myriad games that make it such a compelling platform.
But as those kids grow up and enter adult life, they will find other tools – much like the AIM and MySpace crowds did – and leave Facebook in its wake.
Do we even think about LiveJournal anymore? I didn’t think so.
At this point, there isn’t a more attractive target online than Facebook. And with a new generation of kids growing up on messaging, Facebook chats, and friend news feeds, it should enjoy considerable success as it grows with that generation.
But it’s also difficult to argue that it can ever make more than it would right now. Facebook is the topic of conversation everywhere on the Web and its growth has been truly astounding. It won’t last forever though, and once something new comes along that is seemingly “cooler,” a mass exodus of MySpace proportions will occur and instead of billions, Zuckerberg might walk away with millions.
There’s no shame in waking up and realizing that you’ve built a wildly successful company and it’s time to sell before you may want. Sure, there’s always the possibility that Facebook will be worth ten times as much three years from now, but when you’re playing with a fickle crowd that gets upset with every wrong move, it’s better to err on the side of caution than to see one wrong move totally cripple your service.
In the online space, which is dominated by a select few companies, major firms like Microsoft are trying desperately to establish itself as a force on the Web. And although it may have waited too long to do it, it’s ready to move right now and its desperation for tons of traffic is palpable.
And it’s that formula: fickle users, huge (and valuable) growth, and desperate juggernauts, that makes this the prime time to sell Facebook off and move on. Rest assured, it’s the right decision.
Mashable Prediction Center: Will Facebook be acquired or file for an IPO in 2008?
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After months of contentious deliberation, Microsoft has effectively rescinded its offer to purchase Yahoo Inc. Microsoft’s CEO Steven Ballmer officially delivered a message to Yahoo CEO Jerry Yang stating that “a deal is not to be.”
Ballmer’s indicated in his letter today, in which he explains at length the reasoning for his company’s formal reversal on the buyout attempt, that a hostile effort to claim ownership of Yahoo via a drive to replace voting heads on the Yahoo board was in the end “not sensible for Microsoft” to press forward with. Ballmer confirmed widespread rumors that Microsoft had conveyed their willingness “to raise (their) offer to $33.00 per share,” which would have “added approximately another $5 billion of value to (Yahoo’s) shareholders.” The Microsoft CEO also laid bare Yahoo’s true final request of $37.00 per share, at the very least. All said, Microsoft would have had to have raised its bid by a substantial $10 billion more than it promised in its original offer of $44.6 billion.
In the months following Microsoft’s bid for Yahoo, made official on the eve of February 1, 2008, the value of Microsoft’s offer has diminished as a result of the market decline of its own stock. It has been estimated in recently days to have lingered at a decreased value of some $41 billion.
The full transcript of Microsoft CEO Steven Ballmer’s withdrawal of his company’s offer for Yahoo follows:
May 3, 2008
Mr. Jerry Yang
CEO and Chief Yahoo
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089Dear Jerry:
After over three months, we have reached the conclusion of the process regarding a possible combination of Microsoft and Yahoo!.
I first want to convey my personal thanks to you, your management team, and Yahoo!’s Board of Directors for your consideration of our proposal. I appreciate the time and attention all of you have given to this matter, and I especially appreciate the time that you have invested personally. I feel that our discussions this week have been particularly useful, providing me for the first time with real clarity on what is and is not possible.
I am disappointed that Yahoo! has not moved towards accepting our offer. I first called you with our offer on January 31 because I believed that a combination of our two companies would have created real value for our respective shareholders and would have provided consumers, publishers, and advertisers with greater innovation and choice in the marketplace. Our decision to offer a 62 percent premium at that time reflected the strength of these convictions.
In our conversations this week, we conveyed our willingness to raise our offer to $33.00 per share, reflecting again our belief in this collective opportunity. This increase would have added approximately another $5 billion of value to your shareholders, compared to the current value of our initial offer. It also would have reflected a premium of over 70 percent compared to the price at which your stock closed on January 31. Yet it has proven insufficient, as your final position insisted on Microsoft paying yet another $5 billion or more, or at least another $4 per share above our $33.00 offer.
Also, after giving this week’s conversations further thought, it is clear to me that it is not sensible for Microsoft to take our offer directly to your shareholders. This approach would necessarily involve a protracted proxy contest and eventually an exchange offer. Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo! undesirable as an acquisition for Microsoft.
We regard with particular concern your apparent planning to respond to a “hostile” bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo! today. In our view, such an arrangement with the dominant search provider would make an acquisition of Yahoo! undesirable to us for a number of reasons:
- First, it would fundamentally undermine Yahoo!’s own strategy and long-term viability by encouraging advertisers to use Google as opposed to your Panama paid search system. This would also fragment your search advertising and display advertising strategies and the ecosystem surrounding them. This would undermine the reliance on your display advertising business to fuel future growth.
- Given this, it would impair Yahoo’s ability to retain the talented engineers working on advertising systems that are important to our interest in a combination of our companies.
- In addition, it would raise a host of regulatory and legal problems that no acquirer, including Microsoft, would want to inherit. Among other things, this would consolidate market share with the already-dominant paid search provider in a manner that would reduce competition and choice in the marketplace.
- This would also effectively enable Google to set the prices for key search terms on both their and your search platforms and, in the process, raise prices charged to advertisers on Yahoo. In addition to whatever resulting legal problems, this seems unwise from a business perspective unless in fact one simply wishes to use this as a vehicle to exit the paid search business in favor of Google.
- It could foreclose any chance of a combination with any other search provider that is not already relying on Google’s search services.
Accordingly, your apparent plan to pursue such an arrangement in the event of a proxy contest or exchange offer leads me to the firm decision not to pursue such a path. Instead, I hereby formally withdraw Microsoft’s proposal to acquire Yahoo!.
We will move forward and will continue to innovate and grow our business at Microsoft with the talented team we have in place and potentially through strategic transactions with other business partners.
I still believe even today that our offer remains the only alternative put forward that provides your stockholders full and fair value for their shares. By failing to reach an agreement with us, you and your stockholders have left significant value on the table.
But clearly a deal is not to be.
Thank you again for the time we have spent together discussing this.
Sincerely yours,
Steven A. Ballmer
Chief Executive Officer
Microsoft Corporation
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UPDATE: And now it’s back. Thanks to Mash readers lubos, Philip, et al. for spotting the reboot!
Web video fans, we have some news to share, and you may not take it so kindly. YouTube is down. Yes, the copyright-infringing clips and the homages and assaults on the now infamous Miley Cyrus housed within Google’s all-powerful meme machine are evidently inaccessible.
You may panic.
First highlighted by Allen Stern at CenterNetworks, the outage seems to have stretched the globe, with reports from people spanning the US, the UK, Estonia, and places elsewhere. A few simple requests by yours truly for YouTube clips via Google Search this morning return links to unresponsive pages. (The Australian site is down too, by the way.)
Not good, not good. Maintenance gone wrong, is it? Who’s to say? Google’s not talking, neither on the company blog or, more specifically, on the official Youtube Blog. (Which is also down.) And heck, why would they? Only if this crash doesn’t get cleaned up in reasonably short order (what’s the metric for that, anyway?) will Sergey and Larry and Chad and Steve come out 
with a were-so-sorry and some sort of technological excuse. All we know is that YouTube devotees are likely none too happy with the cold-turkey cutoff.
Right now, it’s likely best to share some alternatives to the pixelated archives of GoogTube. Alright, alright, think, think. There’s Vimeo, Veoh, iTunes Podcasts. Yahoo Video is another. DailyMotion is a good choice. The Onion News Network, too. Those come immediately to mind. Give those a go.
Or you can put this Current TV clip of Mashable bossman Pete Cashmore on repeat. A great choice, actually, regardless of YouTube’s vital stats.
Let us know how your efforts to get into YouTube
© Paul Glazowski for Mashable! - The Social Networking Blog, 2008. |
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Up and coming lifestream aggregator Ping.fm (still in private beta), has just added MySpace Status and Blogger support. That means that you can post to MySpace Status and Blogger with your updates, along with all of the other social networks, blogging platforms and micro-blogging services that Ping.fm already supports, including Facebook, Twitter, Pownce, Jaiku and more. Support for Bebo, Hi5 and LinkedIn are on the way.
As a centralizing service for the purpose of self-broadcasting in an outward manner, it’s rather important for Ping.fm to roll in support for as many services as possible. As a blogger, I know how important it is to be able to spread your content in as many places as possible, from a single service, and have it appear as native as possible. Ping.fm’s prior mobile integration was a little roundabout, but this latest release also includes optimized mobile interfaces, including an iPhone interface.
While I’m aware of the necessity for a service like Ping.fm, I’m still hoping for a browser plug-in, though desktop apps are really taking off as an ubiquitous alternative for micro-blogging (which Ping.fm already supports). We’ll be seeing such cross-network updating tools become features for a number of services, including profile aggregators, social search services, and social browsers, though I feel that Ping.fm will likely survive for some time as a stand-alone service.
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Wired published a piece recently about the supposed stalemate that is likely to result over the coming weeks and months for the Democratic Party in the US in advance of convention season. The magazine highlighted the all but certain necessity for a Clinton-Obama deadlock to be broken though superdelegatory intervention.
And this point puzzles quite a few US citizens. Lots of folks are just now becoming familiar with the mysterious term and and have only recently begun to learn some of names of elected representatives in Washington, D.C. and places elsewhere across the country that bear the title of “superdelegate.” There are naturally strong suspicions that undemocratic tendencies will be exercised behind closed doors when push comes to shove this summer.
According to Wired contributor Sarah Lai Stirland, the blog DemConWatch was “the first to start digging into the superdelegates…(compiling) a list of superdelegates from press releases and statements in news articles. And soon thereafter, several individuals, including those behind DemConWatch, OpenLeft, LiteraryOutpost, and Sourcewatch’s Congresspedia community, established the Superdelegate Transparency Project, which is intended to make your election-year education a little easier get a firm grasp on and make the party’s arcane top-level electoral framework a little more digestible.
The Superdelegate Transparency Project, a comprehensive wiki-based resource, offers site visitors the option to view, among other things, a map of the US upon which states are linked to attached pages with all known information pertaining to their superdelegates. Sounds good, eh? Indeed it does.
Having browsed the resource for a short while, I can tell you that the STP is something that rightly should be promoted far and wide, as it offers perhaps the best collection of data to be found anywhere on the Web at present pertaining to commonly unknown facts about the Democratic Party. The STP is simple to operate - its tables offer straightforward summaries of information the partner sites have so far been able to gather - and because it is an inherently open platform, its designers have made it a point to solicit support from the public at large, which considerably fortifies its reliability.
If you’re at all curious to know the ins and outs of the superdelegate ranks of the American Democratic Party, the Superdelegate Transparency Project is likely the best place to go for any and all details desired.