Facebook for $6 Billion? … Only if Zuckerberg Agrees to Be Implanted With a Livestock-Monitoring Microchip
by John Paczkowski
Posted on July 12, 2007 at 9:03 AM PT
So former analyst Henry Blodget says Microsoft is rumored to be planning to buy Facebook for $6 billion. An intriguing rumor. Bunch of suits from Redmond, Wash., flying down to Silicon Valley carrying Timbuk2 bags overflowing with cash for a smokin’-hot social-networking outfit with appalling ad click-throughs.
That’s right–appalling ad click-throughs. “Facebook’s members appear indifferent even to movie advertising aimed at their demographic,” Nick Denton noted in Valleywag earlier this year. “Click-through rates, the percentage of time users click on an ad, average 0.04%–just 400 clicks in every 1m views–according to one report seen by Valleywag.”
And he wasn’t the only one. “Word on the street, Madison Avenue that is, is that advertisers who have experimented and bought ads on Facebook are universally disappointed with the results,” GigaOm’s Bob Young wrote in February. “Consequently, getting these big brands to come back to the table and pony up again with significant ad-buys is going to be very difficult. In other words, Facebook is looking at a foggy fiscal future, and needs to make some tough decisions.”
Like, say … selling itself to Microsoft. That’s what Blodget says. “No, of course we can’t confirm it,” he writes. “But it makes sense, don’t you think? Steve Ballmer, desperate and furious, sick of sucking wind in the Internet game, sick of losing every Internet in-play company and much of the future to You Know Who, sick of feeling like a has-been also-ran, raiding the bank account and snapping up the hottest company on earth. The fly in the ointment: $6 billion’s a nice fat number, but it’s only 1/25th of Google’s valuation, and the Facebook folks clearly think they’re worth more than that. So maybe Steve will have to throw in another $5 or $10. Or $20. Or maybe Mark Zuckerberg will just tell him to go … home.”
Certainly could happen. Or Microsoft could tell Zuckerberg to do the same. After all, it wouldn’t be the first time. In early 2006, Microsoft was rumored to have passed on Facebook, amused that the company had valued itself at $2 billion or so and incredulous that founder Mark Zuckerberg couldn’t make it out of bed for an 8 a.m. conference call to talk to Microsoft execs:
Anyway, if Microsoft truly is considering shelling out that kind of cash for Facebook, I hope it’s got a clever plan to boost the site’s ad click-throughs. Six billion dollars is a hell of a lot of money to hand to someone who can’t always be bothered to take your phone calls.
