Yahoo Plays Footsie With Facebook Again

    October 11, 2007
    WebProNews Staff

Yahoo is considering an investment in social networking darling Facebook, a move that will either validate Facebook CEO Zuckerberg’s valuation strut, or well, won’t.

Yahoo Plays Footsie With Facebook Again
Yahoo Plays Footsie With Facebook Again

Or Yahoo learns the lesson eBay did about Skype.

Word of said consideration comes via All Things Digital’s Kara Swisher’s anonymous sources, shadowy, but apparently well-dressed "Silicon Valley figure[s]."

Swisher writes:

[S]ources say Yahoo is seriously considering making a major investment in Facebook.

Such a move would be bold for the typically cautious Yahoo, which bungled an attempt to buy Facebook entirely for a bit over $1 billion last year (some say $1.6 billion, but I am told the issue had to do with actually reaching a number just over $1 billion).

Interesting take on which side of that negotiation was bungled; if I remember correctly, reports said Zuckerberg liked neither getting up too early nor un-Velcroing himself from his girlfriend to dicker, and Yahoo bailed.

Either way, no acquisition deal was reached and since then Facebook has been pumping up its own valuation, making most of us scoff when figures like $8 billion are tossed around, and making us fall on the floor when the going rate is suddenly $15 billion.

For perspective, that’s almost 27 times what MySpace sold for back when social networking still had diaper rashes. So either Intermix got screwed, or somebody’s gone megalomaniacal about themselves, especially given that Facebook pulls in half the traffic as MySpace and a third of the pageviews.

And falling, notes Om Malik, but that may just be a seasonal dip – one last swim before summer weather’s completely gone. Or maybe (gasp!) Steve Ballmer was right about the "faddish" nature of Facebook and, well, social networks in general.

I’ll qualify that last bit to particular social networks, not social networking as a whole.