I like a good acquisition rumor as much as the next guy. But, the notion that Google or some other technology or media giant is about to purchase Facebook doesn't seem rooted in the facts.
What we know is that most media companies simply can't afford Facebook. With a reported $150 million run rate growing at at least 100% annually, its valuation is truly subject to negotiation. Reasonable arguments could be made that the company is worth anywhere between $1.5 billion (based on Yahoo's current 6x revenue multiple) or $7.5 billion (based on Baidu's 150 p/e ratio). Depending on what Facebook's actual growth rate and margins are, its valuation could be even higher.
As I've written before, I don't think Facebook is in any rush to achieve an exit. An IPO next year seems to be where the company's principals want to go. Some are speculating that Google will buy Facebook. I don't see it. I understand that Google might consider the company a means of helping people organize their personal information, but I still think it's just too far from Google's core mission. Would Yahoo want to spend a quarter of its stock to bring a property that it wouldn't even be able to monetize properly? I don't think so. And I doubt other media companies such as CBS, Viacom, GE's NBC Universal or News Corp. would want to spend so much on a single property.
Which leaves Microsoft. The software giant already has an advertising deal with Facebook. And as anyone who has seen Soapbox or Spaces knows, Microsoft simply can't build social networks. So, if it wants to play in this segment, it must buy. It has the cash and the need.
The question remains, though, if Facebook's founders have any desire to sell. Unless the momentum stemming from the opening up of Facebook's network to all and the launch of the its platform wanes, I think Zuckerberg & Co. will sit tight and head for an IPO.
For more on Facebook IPO speculation, see:
DealBook
Publishing 2.0
Tags: facebook, accel, ipo, google, goog, cbs, msft, vc, venture+capital
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