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Social Networking Company Facebook Bid Up – Yahoo's Loss

Tue Sep 25, 2007 1:28 pm
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Comments: 1 Views: 252
The rumor lately is that a few different companies are interested in getting a stake in Facebook. It was just a little over a year ago that Yahoo's nearly $1 billion offer was refused, and now the market value is predicted to be closer to $10 billion.

What the loss may be to Yahoo does not predict what the loss may be to Facebook itself if it eventually loses management control to one of the larger more established web companies like Microsoft or Google. The feel and direction of the company waivers once a different team is in place, or even if a different business model is applied. The biggest problem all social networks face is how to make more money from its user base. Currently the estimated revenues of Mysapce are around $300 or so million for 2007. Now considering its account base is 200 million or so, that's around $1.50 per account/year.

What the core user base (high school and college age kids) of Facebook seems to like about the service is that it is safe, controlled, and free of outside influence. Once these latest changes take a real effect it is difficult to estimate whether the core Facebook audience will appreciate it. These latest changes are the addition of outside developers creating applications, opening up the account process to anyone, and more government interference in monitoring Facebook's pledge to keep the network safe.

In today's New York Times the state of New York is now wondering about the legitimacy of these safety procedures and Facebook's commitment to advertising the truth about its service.

Comments
Tue Sep 25, 2007 2:03 pm
Name: corvallistidbits Comment: Well stated, it was speculated today by CNBC that Google was interested in acquiring Facebook. Google stock is at an all time high. Google could purchase facebook and radically change the business model as it now exists.

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