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Article

Title: Yahoo may pay $1 billion for site

Author: Kopytoff, Verne Article Type: Product Analysis
Source: San Francisco Chronicle, pC1(2) Publication Date: Sep 22, 2006
URL of Publication: http://www.sfgate.com

Facebook's namesake online social networking Web site might be purchased by Yahoo! for as much as $1 billion, said a Wall Street Journal report recently published. Facebook would provide Yahoo! with a larger presence in social networking, which is more and more popular as a diversion for those young people using such services. Social networkers create personal Web pages and send messages to friends. Large media companies are very interested in social networking sites because the sites are a lucrative way of bombarding teens with advertisements. Neither Facebook nor Yahoo! have commented on any specific discussions, but News Corp has already purchased MySpace, a rival to Facebook, for $650 million. The perceived value of many smaller social networking companies rose substantially on the news. Because Internet users can lose interest in sites regularly, moving from one to another with comparative ease, there is a risk in such an acquisition, and Facebooks expansion also depends on its ability to extend beyond its college-student audience. In August, Facebook had 14.8 million unique visitors who viewed an average of 437 pages each, which is a very high number, says comScore Media Metrix. That number of pageviews means more displayed ads for owners and therefore more revenue. Accel Partners, a venture capital company that invested in Facebook, has not commented on any talks between Yahoo! and Facebook regarding acquisition, but a spokesman said the board often evaluates various proposals. Gartner analyst Allen Weiner has said Yahoo! would spend its money better through marketing its existing social networking service, which he lauded. Facebook would be difficult to integrate into Yahoo!'s service, said Mr. Weiner, who also notes that that Yahoo!'s interest in Facebook could be the result of industry hype.

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Facebook Inc Yahoo! Inc

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Facebook Yahoo! News

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