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September 22, 2006

Can A Yahoo! - Facebook Deal Really Happen?

By Li Evans

The past two days there's been a lot of news flying around the industry about Yahoo! courting Facebook - but I question - "Can it really happen?".  On so many levels this makes total sense - Yahoo!'s push into the social networking arena being the foremost reason.  It just make logical sense if this is where Yahoo! wants to become the "king" - like Google is currently to search.

Yahoo! can do this well too, as they have with Flickr, De.liciol.us, Yahoo! Answers and their Yahoo! Groups.  This can definitely round out their social networking push.  They bought GeoCities years ago - which could be seen as a predecessor to MySpace and Facebook - but it never really flourished.  The excitement around the communities and social networks within these types of sites by its users is unparalleled to what Yahoo! currently has.

Of course everyone on both sides is keeping pretty much mum on this.  The Wall Street Journal has a great article on the speculation swirling about this round of courting to Facebook.  The article among other things, makes me wonder if this deal could really happen. 

The CEO and found of Facebook is only 22, and apparently doesn't like to come into the office before 10:30 a.m. EST.  He's also brushed off talks before from both Yahoo! and Microsoft.  There's also the speculation that Facebook doesn't want to be acquired - modeling themselves after Search Engine giant Google - making it on their own, despite the calls for and the lure of a big money acquisition.

Then there's Yahoo!.  Wasn't it just yesterday or the day before that they announced that the ad space online is slowing down?  Wasn't it that announcement that tanked their stock by the end of the day?  So can Yahoo! really AFFORD to purchase Facebook.  Granted, they have billions of dollars in revenue, but in reality, could they afford it - Facebook is NOT Myspace.  It doesn't have near the reach, and doesn't have near the ad potential.  Granted the $100 million is nothing to sneeze at, but MySpace was bought for "only" $650 million - this $1 billion figure just seems out of whack, and is just bringing memories of the "internet bubble" back.

Lastly - what about Microsoft?  Didn't they just sign that advertising deal with Facebook?

So many questions, so many "ifs" that have to happen to put this into play.  If it does happen, I think it'd be great for Yahoo!  But it'll start setting off alarms around the industry about over priced acquisition reminiscent to 2001.  So can it happen?  I guess that really depends on whether Facebook can meet for a 10 a.m. meeting.

Others talking about the possibilities of a Yahoo! Facebook merger:

searchmob | sniff it

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» Can A Yahoo! - Facebook Deal Really Happen? from
This article takes a look at the speculation swirling around a possilbe $1 billion dollar merger between Yahoo! and Facebook. Can it really happen in light of Yahoo's recent announcement that its online ad sales have slowed and Facebook's brush off of... [Read More]

» Can A Yahoo! - Facebook Deal Really Happen? from
This article takes a look at the speculation swirling around a possilbe $1 billion dollar merger between Yahoo! and Facebook. Can it really happen in light of Yahoo's recent announcement that its online ad sales have slowed and Facebook's brush off of ... [Read More]

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